The Company A expects their production revenue in 2021 become RM250,500 with the overallfixed cost (FX) RM60,000 and variable cost (VC) RM100,000. The standard deviation ofrevenue, FC and VC are described in TableRevenueFixed CostVariable CostЕxpected250,50061000110000St. Dev.15500410041000If the distribution the simulation is assumed NORMAL, by using Monte-carlo method in excel:a. Calculate the expected profit in the first calculation.b. Identify the calculation of 700 iterations for Mean, Standard Deviation, minimal andmaximal value.c. Calculate potential risk of loss for 700 iterations.

A normal distribution is a symmetrical probability distribution with a bell-shaped curve. Most data…

The Company A expects their production revenue in 2021 become RM250,500 with the overall fixed cost (FX) RM60,000 and variable cost (VC) RM100,000. The standard deviation of revenue, FC and VC are described in Table Expected St. Dev. Revenue 250,500 15500 Fixed Cost 61000 4100 Variable Cost 110000 41000 If the distribution the simulation is assumed NORMAL, by using Monte-carlo method in excel: c. Calculate potential risk of loss for 700 iterations. a. Calculate the expected profit in the first calculation. b. Identify the calculation of 700 iterations for Mean, Standard Deviation, minimal and maximal value.

The Company A expects their production revenue in 2021 become RM250,500 with the overall fixed cost (FX) RM60,000 and variable cost (VC) RM100,000. The standard deviation of revenue, FC and VC are described in Table Expected St. Dev. Revenue 250,500 15500 Fixed Cost 61000 4100 Variable Cost 110000 41000 If the distribution the simulation is assumed NORMAL, by using Monte-carlo method in excel: c. Calculate potential risk of loss for 700 iterations. a. Calculate the expected profit in the first calculation. b. Identify the calculation of 700 iterations for Mean, Standard Deviation, minimal and maximal value.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The Company A expects their production revenue in 2021 become RM250,500 with the overall
fixed cost (FX) RM60,000 and variable cost (VC) RM100,000. The standard deviation of
revenue, FC and VC are described in Table
Revenue
Fixed Cost
Variable Cost
Еxpected
250,500
61000
110000
St. Dev.
15500
4100
41000
If the distribution the simulation is assumed NORMAL, by using Monte-carlo method in excel:
a. Calculate the expected profit in the first calculation.
b. Identify the calculation of 700 iterations for Mean, Standard Deviation, minimal and
maximal value.
c. Calculate potential risk of loss for 700 iterations.

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