Simulation Models Are Useful

question 65

Multiple Choice

Simulation models are useful:
I. To understand the project better II) To forecast expected cash flows
III. To assess the project risk

• A) I only
• B) II only
• C) III only
• D) I, II and III

---

Definitions:

Annual Coupon

The yearly interest payment made to bondholders, typically expressed as a percentage of the face value.

Bankruptcy Claims

Rights to payment held by creditors from a company undergoing bankruptcy proceedings.

Debt/equity Ratio

The proportionality ratio of debt to equity in the context of funding a company's assets.

Optimal Capital Structure

The best mix of debt, equity, and other financial instruments that maximizes a company's value while minimizing its cost of capital.