Use the information below to answer the following questions). Below is a spreadsheet for Trance Electronics. \(\begin{array}{|l|l|l|l|l|l|l|} \hline & {\mathrm{A}} & \mathrm{B} & \mathrm{C} & \mathrm{D} & \mathrm{E} & \mathrm{F} \\ \hline 1 & \text { Trance Electronics } & & & & & \\ \hline 2 & & & & & & \\ \hline 3 & \text { Data } & & & & & \\ \hline 4 & & & & & & \\ \hline 6 & \text { Market size } & 20,000,000 \\ \hline 6 & \text { Unit (monthly Rx) revenue } & \$ 120.00 \\ \hline 7 & \text { Unit (monthly Rx) cost } & \$ 50.00 \\ \hline 8 & \text { Discount rate } & 8 \% \\ \hline 9 & & \\ \hline 10 & \text { Project costs } & \\ \hline 11 & \text { R\&D } & \$ 750,000,000 \\ \hline 12 & \text { Clinical Trials } & \$ 100,000,000 \\ \hline 13 & \text { Total Project Costs } & \\ \hline 14 & & & & & & \\ \hline 15 & \text { Model } & & & & & \\ \hline 16 & & & & & & \\ \hline 17 & \text { Year } & 1 & 2 & 3 & 4 & 5 \\ \hline 18 & \text { Market growth factor } & & 4 \% & 4 \% & 4 \% & 4 \%\\ \hline 19 & \text { Market size } & & & & & \\ \hline 20 & \text { Market share growth rate } & & 18 \% & 18 \% & 18 \% & 18 \% \\ \hline 21 & \text { Market share } & 7 \% & & & & \\ \hline 22 & \text { Sales } \\ \hline 23 & \\ \hline 24 & \text { Annual revenue } \\ \hline 25 & \text { Annual costs } \\ \hline 26 & \text { Profit } \\ \hline 27 & \text { Cumulative net profit } \\ \hline 28\\ \hline 29& \text { Net present value} \\ \hline \end{array}\) $\quad$ Suppose that the project manager of Trance Electronics has identified the following uncertain variables in the model and the distributions and parameters that describe them, as follows: Market size: normal with mean of 20,000,000 units and standard deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and $800,000,000. Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation $30,000,000. Annual market growth factor: triangular with minimum = 2%, maximum = 6%, and most likely = 3%. Annual market share growth rate: triangular with minimum = 15%, maximum = 25%, and most likely = 20%. The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run the simulation and answer the following questions using the Analytic Solver Platform. [Hint: choose the closest value.] -What is the risk that the net present value over the 5 years will not be positive?

A) approximately 40% B) approximately 57% C) approximately 24% D) approximately 77% A) approximately 40% B) approximately 57% C) approximately 24% D) approximately 77%

Use the information below to answer the following questions). Below is a spreadsheet for Trance Electronics. \(\begin{array}{|l|l|l|l|l|l|l|} \hline & {\mathrm{A}} & \mathrm{B} & \mathrm{C} & \mathrm{D} & \mathrm{E} & \mathrm{F} \\ \hline 1 & \text { Trance Electronics } & & & & & \\ \hline 2 & & & & & & \\ \hline 3 & \text { Data } & & & & & \\ \hline 4 & & & & & & \\ \hline 6 & \text { Market size } & 20,000,000 \\ \hline 6 & \text { Unit (monthly Rx) revenue } & \$ 120.00 \\ \hline 7 & \text { Unit (monthly Rx) cost } & \$ 50.00 \\ \hline 8 & \text { Discount rate } & 8 \% \\ \hline 9 & & \\ \hline 10 & \text { Project costs } & \\ \hline 11 & \text { R\&D } & \$ 750,000,000 \\ \hline 12 & \text { Clinical Trials } & \$ 100,000,000 \\ \hline 13 & \text { Total Project Costs } & \\ \hline 14 & & & & & & \\ \hline 15 & \text { Model } & & & & & \\ \hline 16 & & & & & & \\ \hline 17 & \text { Year } & 1 & 2 & 3 & 4 & 5 \\ \hline 18 & \text { Market growth factor } & & 4 \% & 4 \% & 4 \% & 4 \%\\ \hline 19 & \text { Market size } & & & & & \\ \hline 20 & \text { Market share growth rate } & & 18 \% & 18 \% & 18 \% & 18 \% \\ \hline 21 & \text { Market share } & 7 \% & & & & \\ \hline 22 & \text { Sales } \\ \hline 23 & \\ \hline 24 & \text { Annual revenue } \\ \hline 25 & \text { Annual costs } \\ \hline 26 & \text { Profit } \\ \hline 27 & \text { Cumulative net profit } \\ \hline 28\\ \hline 29& \text { Net present value} \\ \hline \end{array}\) $\quad$ Suppose that the project manager of Trance Electronics has identified the following uncertain variables in the model and the distributions and parameters that describe them, as follows: Market size: normal with mean of 20,000,000 units and standard deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and $800,000,000. Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation $30,000,000. Annual market growth factor: triangular with minimum = 2%, maximum = 6%, and most likely = 3%. Annual market share growth rate: triangular with minimum = 15%, maximum = 25%, and most likely = 20%. The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run the simulation and answer the following questions using the Analytic Solver Platform. [Hint: choose the closest value.] -What is the expected loss ratio obtained from the simulation results of the net present value?

A) 93.50% B) 72.45% C) 67.32% D) 86.32% A) 93.50% B) 72.45% C) 67.32% D) 86.32%

Use the information below to answer the following questions). Below is a spreadsheet for Trance Electronics. \(\begin{array}{|l|l|l|l|l|l|l|} \hline & {\mathrm{A}} & \mathrm{B} & \mathrm{C} & \mathrm{D} & \mathrm{E} & \mathrm{F} \\ \hline 1 & \text { Trance Electronics } & & & & & \\ \hline 2 & & & & & & \\ \hline 3 & \text { Data } & & & & & \\ \hline 4 & & & & & & \\ \hline 6 & \text { Market size } & 20,000,000 \\ \hline 6 & \text { Unit (monthly Rx) revenue } & \$ 120.00 \\ \hline 7 & \text { Unit (monthly Rx) cost } & \$ 50.00 \\ \hline 8 & \text { Discount rate } & 8 \% \\ \hline 9 & & \\ \hline 10 & \text { Project costs } & \\ \hline 11 & \text { R\&D } & \$ 750,000,000 \\ \hline 12 & \text { Clinical Trials } & \$ 100,000,000 \\ \hline 13 & \text { Total Project Costs } & \\ \hline 14 & & & & & & \\ \hline 15 & \text { Model } & & & & & \\ \hline 16 & & & & & & \\ \hline 17 & \text { Year } & 1 & 2 & 3 & 4 & 5 \\ \hline 18 & \text { Market growth factor } & & 4 \% & 4 \% & 4 \% & 4 \%\\ \hline 19 & \text { Market size } & & & & & \\ \hline 20 & \text { Market share growth rate } & & 18 \% & 18 \% & 18 \% & 18 \% \\ \hline 21 & \text { Market share } & 7 \% & & & & \\ \hline 22 & \text { Sales } \\ \hline 23 & \\ \hline 24 & \text { Annual revenue } \\ \hline 25 & \text { Annual costs } \\ \hline 26 & \text { Profit } \\ \hline 27 & \text { Cumulative net profit } \\ \hline 28\\ \hline 29& \text { Net present value} \\ \hline \end{array}\) $\quad$ Suppose that the project manager of Trance Electronics has identified the following uncertain variables in the model and the distributions and parameters that describe them, as follows: Market size: normal with mean of 20,000,000 units and standard deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and $800,000,000. Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation $30,000,000. Annual market growth factor: triangular with minimum = 2%, maximum = 6%, and most likely = 3%. Annual market share growth rate: triangular with minimum = 15%, maximum = 25%, and most likely = 20%. The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run the simulation and answer the following questions using the Analytic Solver Platform. [Hint: choose the closest value.] -What is the correlation of the market size with the NPV with reference to the sensitivity chart?

A) 0.043 B) 0.888 C) -0.341 D) -0.026 A) 0.043 B) 0.888 C) -0.341 D) -0.026

Use the information below to answer the following questions). Below is a spreadsheet for Trance Electronics. \(\begin{array}{|l|l|l|l|l|l|l|} \hline & {\mathrm{A}} & \mathrm{B} & \mathrm{C} & \mathrm{D} & \mathrm{E} & \mathrm{F} \\ \hline 1 & \text { Trance Electronics } & & & & & \\ \hline 2 & & & & & & \\ \hline 3 & \text { Data } & & & & & \\ \hline 4 & & & & & & \\ \hline 6 & \text { Market size } & 20,000,000 \\ \hline 6 & \text { Unit (monthly Rx) revenue } & \$ 120.00 \\ \hline 7 & \text { Unit (monthly Rx) cost } & \$ 50.00 \\ \hline 8 & \text { Discount rate } & 8 \% \\ \hline 9 & & \\ \hline 10 & \text { Project costs } & \\ \hline 11 & \text { R\&D } & \$ 750,000,000 \\ \hline 12 & \text { Clinical Trials } & \$ 100,000,000 \\ \hline 13 & \text { Total Project Costs } & \\ \hline 14 & & & & & & \\ \hline 15 & \text { Model } & & & & & \\ \hline 16 & & & & & & \\ \hline 17 & \text { Year } & 1 & 2 & 3 & 4 & 5 \\ \hline 18 & \text { Market growth factor } & & 4 \% & 4 \% & 4 \% & 4 \%\\ \hline 19 & \text { Market size } & & & & & \\ \hline 20 & \text { Market share growth rate } & & 18 \% & 18 \% & 18 \% & 18 \% \\ \hline 21 & \text { Market share } & 7 \% & & & & \\ \hline 22 & \text { Sales } \\ \hline 23 & \\ \hline 24 & \text { Annual revenue } \\ \hline 25 & \text { Annual costs } \\ \hline 26 & \text { Profit } \\ \hline 27 & \text { Cumulative net profit } \\ \hline 28\\ \hline 29& \text { Net present value} \\ \hline \end{array}\) $\quad$ Suppose that the project manager of Trance Electronics has identified the following uncertain variables in the model and the distributions and parameters that describe them, as follows: Market size: normal with mean of 20,000,000 units and standard deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and $800,000,000. Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation $30,000,000. Annual market growth factor: triangular with minimum = 2%, maximum = 6%, and most likely = 3%. Annual market share growth rate: triangular with minimum = 15%, maximum = 25%, and most likely = 20%. The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run the simulation and answer the following questions using the Analytic Solver Platform. [Hint: choose the closest value.] -What is the standard deviation obtained from the simulation results of the net present value?

A) $204,868,924 B) $162,135,408 C) $182,992,245 D) $138,134,040 A) $204,868,924 B) $162,135,408 C) $182,992,245 D) $138,134,040

Answer the following questions) using the Analytic Solver Platform 5000 trials per simulation; use the Latin Hypercube sampling method). [Hint: choose the closest value.] Consider the spreadsheet for a Monte Carlo Simulation in Excel. \[\begin{array} { | l | l | l | l | l | l | } \hline & { \text { A } } & \text { B } & \text { C } & \text { D } & \text { E } \\ \hline 1 & \text { Monte Carlo Sirnulation } & & & \text { Histarical } & \\ & \text { in Exarel } & && \text { Candy Sales } & \$ 264.00 \\ \hline 2 & & && 50 & \$ 264.00 \\ \hline 3 & \text { Data } & & & 45 & \$ 264.00 \\ \hline 4 & & & & 40 & \$ 228.00 \\ \hline 5 & \text { Selling price } & \$ 18.00 & & 46 & \$ 264.00 \\ \hline 6 & \text { Cost } & \$ 12.00 & & 43 & \$ 255.00 \\ \hline 7 & \text { Discourt price } & \$ 9.00 & & 43 & \$ 255.00 \\ \hline 8 & & && 46 & \$ 264.00 \\ \hline 9 & \text { Model } & & & 42 & \$ 246.00 \\ \hline 10 & & && 44 & \$ 264.00 \\ \hline 11 & \text { Dernand } & 44 & & 43 & \$ 255.00 \\ \hline 12 & \text { Purchase Quantity } & 44 && 47 & \$ 264.00 \\ \hline 13 & & && 41 & \$ 237.00 \\ \hline 14 & \text { Quantity Sold } & && 41 & \$ 237.00 \\ \hline 15 & \text { Surplus Quantity } & && 45 & \$ 264.00 \\ \hline 16 & & && 51 & \$ 264.00 \\ \hline 17 & \text { Profit } & && 43 & \$ 255.00 \\ \hline 18 & & && 45 & \$ 264.00 \\ \hline 19 & & && 42 & \$ 246.00 \\ \hline 20 & & && 44 & \$ 264.00 \\ \hline 21 & & && 48 & \$ 264.00\\ \hline 21 &&&\text { Average Profit }\\ \hline \end{array}\] $\quad$ -What is the value of mode?

A) $228 B) $245 C) $255 D) $264 A) $228 B) $245 C) $255 D) $264

Use the information below to answer the following questions). Below is a spreadsheet for Trance Electronics. \(\begin{array}{|l|l|l|l|l|l|l|} \hline & {\mathrm{A}} & \mathrm{B} & \mathrm{C} & \mathrm{D} & \mathrm{E} & \mathrm{F} \\ \hline 1 & \text { Trance Electronics } & & & & & \\ \hline 2 & & & & & & \\ \hline 3 & \text { Data } & & & & & \\ \hline 4 & & & & & & \\ \hline 6 & \text { Market size } & 20,000,000 \\ \hline 6 & \text { Unit (monthly Rx) revenue } & \$ 120.00 \\ \hline 7 & \text { Unit (monthly Rx) cost } & \$ 50.00 \\ \hline 8 & \text { Discount rate } & 8 \% \\ \hline 9 & & \\ \hline 10 & \text { Project costs } & \\ \hline 11 & \text { R\&D } & \$ 750,000,000 \\ \hline 12 & \text { Clinical Trials } & \$ 100,000,000 \\ \hline 13 & \text { Total Project Costs } & \\ \hline 14 & & & & & & \\ \hline 15 & \text { Model } & & & & & \\ \hline 16 & & & & & & \\ \hline 17 & \text { Year } & 1 & 2 & 3 & 4 & 5 \\ \hline 18 & \text { Market growth factor } & & 4 \% & 4 \% & 4 \% & 4 \%\\ \hline 19 & \text { Market size } & & & & & \\ \hline 20 & \text { Market share growth rate } & & 18 \% & 18 \% & 18 \% & 18 \% \\ \hline 21 & \text { Market share } & 7 \% & & & & \\ \hline 22 & \text { Sales } \\ \hline 23 & \\ \hline 24 & \text { Annual revenue } \\ \hline 25 & \text { Annual costs } \\ \hline 26 & \text { Profit } \\ \hline 27 & \text { Cumulative net profit } \\ \hline 28\\ \hline 29& \text { Net present value} \\ \hline \end{array}\) $\quad$ Suppose that the project manager of Trance Electronics has identified the following uncertain variables in the model and the distributions and parameters that describe them, as follows: Market size: normal with mean of 20,000,000 units and standard deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and $800,000,000. Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation $30,000,000. Annual market growth factor: triangular with minimum = 2%, maximum = 6%, and most likely = 3%. Annual market share growth rate: triangular with minimum = 15%, maximum = 25%, and most likely = 20%. The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run the simulation and answer the following questions using the Analytic Solver Platform. [Hint: choose the closest value.] -What is the coefficient of variation obtained from the simulation results of the net present value?

A) 1.78392 B) -2.23958 C) -1.36659 D) 2.87645 A) 1.78392 B) -2.23958 C) -1.36659 D) 2.87645

Exam 12: Simulation and Risk Analysis

Use the information below to answer the following questions). Below is a spreadsheet for Trance Electronics. 1 Trance Electronics 2 3 Data 4 6 Market size 20,000,000 6 Unit (monthly Rx) revenue \ 120.00 7 Unit (monthly Rx) cost \ 50.00 8 Discount rate 8\% 9 10 Project costs 11 R\&D \ 750,000,000 12 Clinical Trials \ 100,000,000 13 Total Project Costs 14 15 Model 16 17 Year 1 2 3 4 5 18 Market growth factor 4\% 4\% 4\% 4\% 19 Market size 20 Market share growth rate 18\% 18\% 18\% 18\% 21 Market share 7\% 22 Sales 23 24 Annual revenue 25 Annual costs 26 Profit 27 Cumulative net profit 28 29 Net present value $\quad$ Suppose that the project manager of Trance Electronics has identified the following uncertain variables in the model and the distributions and parameters that describe them, as follows: Market size: normal with mean of 20,000,000 units and standard deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and $800,000,000. Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation $30,000,000. Annual market growth factor: triangular with minimum = 2%, maximum = 6%, and most likely = 3%. Annual market share growth rate: triangular with minimum = 15%, maximum = 25%, and most likely = 20%. The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run the simulation and answer the following questions using the Analytic Solver Platform. [Hint: choose the closest value.] -What is the risk that the net present value over the 5 years will not be positive?

(Multiple Choice)

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Question 21

Use the information below to answer the following questions). Below is a spreadsheet for Trance Electronics. 1 Trance Electronics 2 3 Data 4 6 Market size 20,000,000 6 Unit (monthly Rx) revenue \ 120.00 7 Unit (monthly Rx) cost \ 50.00 8 Discount rate 8\% 9 10 Project costs 11 R\&D \ 750,000,000 12 Clinical Trials \ 100,000,000 13 Total Project Costs 14 15 Model 16 17 Year 1 2 3 4 5 18 Market growth factor 4\% 4\% 4\% 4\% 19 Market size 20 Market share growth rate 18\% 18\% 18\% 18\% 21 Market share 7\% 22 Sales 23 24 Annual revenue 25 Annual costs 26 Profit 27 Cumulative net profit 28 29 Net present value $\quad$ Suppose that the project manager of Trance Electronics has identified the following uncertain variables in the model and the distributions and parameters that describe them, as follows: Market size: normal with mean of 20,000,000 units and standard deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and $800,000,000. Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation $30,000,000. Annual market growth factor: triangular with minimum = 2%, maximum = 6%, and most likely = 3%. Annual market share growth rate: triangular with minimum = 15%, maximum = 25%, and most likely = 20%. The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run the simulation and answer the following questions using the Analytic Solver Platform. [Hint: choose the closest value.] -What is the expected loss ratio obtained from the simulation results of the net present value?

(Multiple Choice)

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Question 22

Uniform or triangular distributions are used in the absence of data.

(True/False)

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Question 23

Use the information below to answer the following questions). Below is a spreadsheet for Trance Electronics. 1 Trance Electronics 2 3 Data 4 6 Market size 20,000,000 6 Unit (monthly Rx) revenue \ 120.00 7 Unit (monthly Rx) cost \ 50.00 8 Discount rate 8\% 9 10 Project costs 11 R\&D \ 750,000,000 12 Clinical Trials \ 100,000,000 13 Total Project Costs 14 15 Model 16 17 Year 1 2 3 4 5 18 Market growth factor 4\% 4\% 4\% 4\% 19 Market size 20 Market share growth rate 18\% 18\% 18\% 18\% 21 Market share 7\% 22 Sales 23 24 Annual revenue 25 Annual costs 26 Profit 27 Cumulative net profit 28 29 Net present value $\quad$ Suppose that the project manager of Trance Electronics has identified the following uncertain variables in the model and the distributions and parameters that describe them, as follows: Market size: normal with mean of 20,000,000 units and standard deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and $800,000,000. Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation $30,000,000. Annual market growth factor: triangular with minimum = 2%, maximum = 6%, and most likely = 3%. Annual market share growth rate: triangular with minimum = 15%, maximum = 25%, and most likely = 20%. The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run the simulation and answer the following questions using the Analytic Solver Platform. [Hint: choose the closest value.] -What is the correlation of the market size with the NPV with reference to the sensitivity chart?

(Multiple Choice)

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Question 24

Use the information below to answer the following questions). Below is a spreadsheet for Trance Electronics. 1 Trance Electronics 2 3 Data 4 6 Market size 20,000,000 6 Unit (monthly Rx) revenue \ 120.00 7 Unit (monthly Rx) cost \ 50.00 8 Discount rate 8\% 9 10 Project costs 11 R\&D \ 750,000,000 12 Clinical Trials \ 100,000,000 13 Total Project Costs 14 15 Model 16 17 Year 1 2 3 4 5 18 Market growth factor 4\% 4\% 4\% 4\% 19 Market size 20 Market share growth rate 18\% 18\% 18\% 18\% 21 Market share 7\% 22 Sales 23 24 Annual revenue 25 Annual costs 26 Profit 27 Cumulative net profit 28 29 Net present value $\quad$ Suppose that the project manager of Trance Electronics has identified the following uncertain variables in the model and the distributions and parameters that describe them, as follows: Market size: normal with mean of 20,000,000 units and standard deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and $800,000,000. Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation $30,000,000. Annual market growth factor: triangular with minimum = 2%, maximum = 6%, and most likely = 3%. Annual market share growth rate: triangular with minimum = 15%, maximum = 25%, and most likely = 20%. The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run the simulation and answer the following questions using the Analytic Solver Platform. [Hint: choose the closest value.] -What is the standard deviation obtained from the simulation results of the net present value?

(Multiple Choice)

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Question 25

What is the expected loss determined from the simulation results?

(Multiple Choice)

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Question 26

Answer the following questions) using the Analytic Solver Platform 5000 trials per simulation; use the Latin Hypercube sampling method). [Hint: choose the closest value.] Consider the spreadsheet for a Monte Carlo Simulation in Excel. A B C D E 1 Monte Carlo Sirnulation Histarical in Exarel Candy Sales \ 264.00 2 50 \ 264.00 3 Data 45 \ 264.00 4 40 \ 228.00 5 Selling price \ 18.00 46 \ 264.00 6 Cost \ 12.00 43 \ 255.00 7 Discourt price \ 9.00 43 \ 255.00 8 46 \ 264.00 9 Model 42 \ 246.00 10 44 \ 264.00 11 Dernand 44 43 \ 255.00 12 Purchase Quantity 44 47 \ 264.00 13 41 \ 237.00 14 Quantity Sold 41 \ 237.00 15 Surplus Quantity 45 \ 264.00 16 51 \ 264.00 17 Profit 43 \ 255.00 18 45 \ 264.00 19 42 \ 246.00 20 44 \ 264.00 21 48 \ 264.00 21 Average Profit $\quad$ -What is the value of mode?

(Multiple Choice)

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Question 27

Use the information below to answer the following questions). Below is a spreadsheet for Trance Electronics. 1 Trance Electronics 2 3 Data 4 6 Market size 20,000,000 6 Unit (monthly Rx) revenue \ 120.00 7 Unit (monthly Rx) cost \ 50.00 8 Discount rate 8\% 9 10 Project costs 11 R\&D \ 750,000,000 12 Clinical Trials \ 100,000,000 13 Total Project Costs 14 15 Model 16 17 Year 1 2 3 4 5 18 Market growth factor 4\% 4\% 4\% 4\% 19 Market size 20 Market share growth rate 18\% 18\% 18\% 18\% 21 Market share 7\% 22 Sales 23 24 Annual revenue 25 Annual costs 26 Profit 27 Cumulative net profit 28 29 Net present value $\quad$ Suppose that the project manager of Trance Electronics has identified the following uncertain variables in the model and the distributions and parameters that describe them, as follows: Market size: normal with mean of 20,000,000 units and standard deviation of 4,000,000 units. R&D costs: uniform between $600,000,000 and $800,000,000. Clinical trial costs: lognormal with mean of $150,000,000 and standard deviation $30,000,000. Annual market growth factor: triangular with minimum = 2%, maximum = 6%, and most likely = 3%. Annual market share growth rate: triangular with minimum = 15%, maximum = 25%, and most likely = 20%. The number of trials per simulation is equal to 10,000 at a Sim. Random Seed of 2. Run the simulation and answer the following questions using the Analytic Solver Platform. [Hint: choose the closest value.] -What is the coefficient of variation obtained from the simulation results of the net present value?

(Multiple Choice)

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Question 28

What is the value of mode obtained from the simulation results?

(Multiple Choice)

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Question 29

Uniform or triangular distributions are used in the absence of data.

What is the expected loss determined from the simulation results?

What is the value of mode obtained from the simulation results?

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