The Monte Carlo Simulation

question 21

Multiple Choice

The Monte Carlo simulation:

• A) can be useful for estimating a project's market risk.
• B) uses probability distributions for variables as input data to estimate the project's net present value (NPV).
• C) produces both an expected NPV (or IRR) and a measure of the riskiness of the NPV or IRR for different scenarios.
• D) gives the exact outcome that can be expected from a project.
• E) calculates NPV for a change in one key variable.

---

Definitions:

Wavelength

The distance between two consecutive points of the same phase in a wave, such as from crest to crest or trough to trough.

Energy

The capacity to do work, existing in various forms such as kinetic, potential, thermal, electrical, chemical, and nuclear.

Cyclic Electron Pathway

is a photosynthetic process in light reactions where electrons are recycled allowing ATP production without the buildup of NADPH or oxygen release.

Photosystem I

A component of the photosynthesis process in plants and cyanobacteria that captures light energy for ATP and NADPH production.