Use the Information Below to Answer the Following Question(s)

question 43

Multiple Choice

Use the information below to answer the following question(s) .
Below is a spreadsheet for Trance Electronics.

Suppose that the project manager of Trance Electronics has identified the following uncertain variables in the model and the distributions and parameters that describe them, as follows:
: normal with mean of 2,000,000 units and standard deviation of 400,000 units.
: uniform between $600,000,000 and $800,000,000.
: lognormal with mean of $150,000,000 and standard deviation $30,000,000.
: triangular with minimum = 2%, maximum = 6%, and most likely = 3%.
: triangular with minimum = 15%, maximum = 25%, and most likely = 20%.
The number of trials per simulation is equal to 10,000 at a Sim.Random Seed of 2.Run the simulation and answer the following questions using the Risk Solver Platform.
-What is the correlation of the R&D cost with the NPV with reference to the sensitivity chart?

• A)-0.361
• B)0.028
• C)0.908
• D)-0.194

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Definitions:

Voice-Activated Software

A type of software that allows the user to give commands and control the device through voice instructions.

Marginal Costs

The additional cost incurred from the production of one more unit of a product or service.

Potential Customers

Potential customers are individuals or entities that have not yet purchased but have shown interest or fit the profile of a company's target market.

Expected Profit

The projected financial gain a company anticipates earning from its operations or investments, based on various assumptions and calculations.