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

question 39

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 expected value margin obtained from the simulation results of the net present value?

• A)0.864
• B)-0.708
• C)0.343
• D)-0.467

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Definitions:

Income

The money that an individual or business receives in exchange for providing a good or service or through investing capital.

Risk-neutral

Refers to individuals or entities that are indifferent between choices with varying levels of risk, focusing solely on the possible outcomes' expected values.

Risk-loving

A preference or inclination for taking on risks where the potential for gains outweighs the potential losses, as opposed to risk-aversion.

Risk-averse

describes an individual or entity that prefers to avoid risk and opts for the option with the least uncertainty.