Asked by Jessica Romero on Jul 17, 2024
Verified
In the NPV forecast chart generated after running the simulation,you enter the number 0 in the left range box of the forecast chart and press the enter key.What exactly is the result of the above action?
A) It determines the percentage of risk that the NPV over the five years will not be positive.
B) It determines the probability of a positive NPV value.
C) It determines the cumulative profit over the five year range.
D) It determines the number of trials shown in the NPV forecast chart.
NPV Forecast Chart
An NPV Forecast Chart predicts the Net Present Value over time, helping in assessing the profitability of investments.
Cumulative Profit
The total amount of profit earned over a specific period, taking into consideration all revenues and costs.
- Master the technique of interpreting projection graphs in Crystal Ball.
- Familiarize oneself with the methodology of risk and probability calculation in Crystal Ball.
Verified Answer
KG
Kanika GroverJul 18, 2024
Final Answer :
B
Explanation :
Entering 0 in the left range box of the forecast chart and pressing the enter key will determine the probability of a positive NPV value. This means it will show the percentage of simulations where the NPV is positive, giving an idea of the likelihood of profitability in the project.
Learning Objectives
- Master the technique of interpreting projection graphs in Crystal Ball.
- Familiarize oneself with the methodology of risk and probability calculation in Crystal Ball.