Which One of the Following Statements Regarding Simulation Analysis Is

question 44

Multiple Choice

Which one of the following statements regarding simulation analysis is False?

• A) Simulation analysis is a form of hypothesis testing.
• B) In simulation, dependent variables reflect the values of both the decision variables and the uncontrollable variables.
• C) Statistical methods require the replication of simulation runs.
• D) Each time a simulation model is run for a given set of decision variables, the same random numbers must be used.

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Definitions:

NPV

Net Present Value; a calculation that compares the value of money now to the value of that money in the future, taking inflation and returns into account.

Static DCF Analysis

A method of valuing a project, company, or asset using the concepts of the time value of money where all cash flows are assumed to occur at fixed points in time.

Option to Expand

The option to expand is a strategic flexibility available to companies, allowing them to increase their investment in a project based on future market conditions or performance indicators.

Cash Break-even

The point where a business's cash inflows match its cash outflows, excluding non-cash expenses, indicating no net gain or loss.