Exhibit 10-1 a Company Is in the Planning Phase of Constructing a Constructing

question 22

Essay

Exhibit 10-1
A company is in the planning phase of constructing a new production facility. It wants to build a simulation model for the economics of the facility, and one key uncertain input is the construction cost. For each of the scenarios in the questions below, choose an "appropriate" distribution, together with its parameters, and explain your choice.
-Refer to Exhibit 10-1.Engineering also believes the construction time will be from 5 to 9 months.However,they believe that 7 months is twice as likely as either 6 months or 8 months and that either of these latter possibilities is three times as likely as either 5 months or 9 months.

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Definitions:

Territorial Governments

Systems of government established in territories, which are regions that are not fully autonomous or sovereign.

Government Business Enterprise

A government-owned entity that operates with the intention to produce goods or services for the market and is expected to be financially self-sufficient.

Statement Of Operations

A financial document, also known as an income statement, showing a company's revenues, expenses, and profits or losses over a specified period.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.