The End Result of a Simulation Analysis Is

question 49

Multiple Choice

The end result of a simulation analysis is

• A) a probability distribution of project cash flows.
• B) a clear decision on whether or not a project should be accepted.
• C) a probability distribution of possible NPV's.
• D) a list of value drivers and their probabilities.

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Definitions:

Net Income

A company's total profit calculated by subtracting total expenses from total revenue.

Product Line

A series of related products offered by a company that serve similar functions or are targeted at a similar customer base.

Fixed Costs

Expenses that do not change with changes in the volume of production or sales, such as rent or salaries.

Contribution Margin

The difference between the sales revenue of a product and its variable costs, indicating how much contributes to covering fixed costs and generating profit.