Monte Carlo Simulation

question 185

Multiple Choice

Monte Carlo simulation

• A) Can be useful for estimating a project's stand-alone risk.
• B) Is capable of using probability distributions for variables as input data instead of a single numerical estimate for each variable.
• C) Produces both an expected NPV (or IRR)and a measure of the riskiness of the NPV or IRR.
• D) All of the above.
• E) Only answers a and b are correct.

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Definitions:

New Product

A product that has been recently developed or introduced to the market, offering new or enhanced features.

Marketing

is the process of creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Potential Value

Represents the future benefits or value that an asset, investment, or action will potentially generate, not yet realized.

Innovation Process

A series of steps that begins with ideation and proceeds through to the implementation of new products, services, or processes.