Setting Up a Probability Distribution, Building a Cumulative Probability Distribution

question 53

Multiple Choice

Setting up a probability distribution, building a cumulative probability distribution, and generating random numbers are:

• A) necessary when the underlying probability distribution is normal.
• B) three of the five steps in Monte Carlo simulation.
• C) elements of physical simulation but not mathematical simulation.
• D) the elements of the threefold idea behind simulation.
• E) advantages of simulation.

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Definitions:

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating its short-term financial health and operational efficiency.

Net Fixed Assets

The value of a company's fixed assets, such as property and equipment, minus any accumulated depreciation.

Total Assets

Total assets comprise the sum of all assets, both current and non-current, owned by a company and recorded in the balance sheet.

Average Collection Period

The expected time a business collects payments from its customers for goods or services it has sold on credit terms.