The Values for Random Variables in a Monte Carlo Simulation

question 35

Multiple Choice

The values for random variables in a Monte Carlo simulation are

• A)selected manually.
• B)generated randomly from probability distributions.
• C)taken from forecasting analysis.
• D)derived secondarily using formulas.

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Definitions:

Valve Division

A specialized department within a company focused on the production and distribution of valves.

Transfer Price

The price charged between related entities within the same corporation for goods and services exchanged.

Outside Supplier

A third-party entity that provides goods or services to a company, which are not produced in-house.

Contribution Margin

The amount by which sales revenue exceeds variable costs of production, indicating how much revenue contributes to fixed costs and profits.