contemporary engineering economics, 4 th edition, © 2007 risk simulation lecture no. 49 chapter 12...
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Contemporary Engineering
Economics, 4th edition, © 2007
Risk Simulation
Lecture No. 49Chapter 12Contemporary Engineering EconomicsCopyright, © 2006
Contemporary Engineering
Economics, 4th edition, © 2007
Logical Steps Involved in Simulating a Risky Investment
Contemporary Engineering
Economics, 4th edition, © 2007
A Logical Sequence of a Monte Carlo Simulation to Obtain an NPW Distribution
Contemporary Engineering
Economics, 4th edition, © 2007
A Sampling Scheme for Discrete and Continuous Random Variables
Contemporary Engineering
Economics, 4th edition, © 2007
Observed NPW Values ($)
Contemporary Engineering
Economics, 4th edition, © 2007
Simulated NPW Frequency DistributionMean = $44,245, Standard Deviation = $18,585
Contemporary Engineering
Economics, 4th edition, © 2007
Simulation Result Based on 200 Iterations
Contemporary Engineering
Economics, 4th edition, © 2007
Risk Simulation with @RISK Create a Cash Flow Statement with Excel Define Uncertainty Pick Your Bottom Line Simulate Analyzing the Simulation Result Screen
Contemporary Engineering
Economics, 4th edition, © 2007
Step 1: Create a Cash Flow Statement with Excel
Contemporary Engineering
Economics, 4th edition, © 2007
Step 2: Define Uncertainty
Contemporary Engineering
Economics, 4th edition, © 2007
Step 3: Pick Your Bottom Line – NPW at Cell G13
G13 Output cell
Add Output
Contemporary Engineering
Economics, 4th edition, © 2007
Step 4: Simulate
Start Simulation
Simulation Setting
Start @RISK
Contemporary Engineering
Economics, 4th edition, © 2007
Step 5: Analyzing the Simulation Result Screen