Which Approach Estimates NPV by Taking a Distribution of Values

question 32

Multiple Choice

Which approach estimates NPV by taking a distribution of values for each of the model's assumptions?

• A) Forecasting simulation
• B) Monte Carlo simulation
• C) Sensitivity analysis
• D) Scenario analysis

---

Definitions:

Classical Learning

Classical learning is a term often used to describe classical conditioning, a foundational concept in psychology where a neutral stimulus becomes associated with a meaningful stimulus, eliciting a conditioned response.

Stimulus Generalization

Learning that occurs when stimuli that are similar but not identical to the conditioned stimulus produce the conditioned response.

Stimulus Discrimination

Learning to differentiate between two similar stimuli when only one of them is consistently associated with the unconditioned stimulus.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a reflexive response without the need for prior learning.