In this tutorial we learn how to perform Monte Carlo iteration analysis to account for uncertainty in variables. In this scenario, we examine uncertainty in cost, benefit and growth rate values for a project and how they affect the net present value (NPV).
Excel document link: https://drive.google.com/open?id=0B_lD7FHorWGzSGhMWHh5Ukx3Vzg
Check out the NEW WEBSITE: https://growyourcareer.com and look under "Downloads"
UPDATED BLOG: https://arcologydesigns.blogspot.com
Cell F2: =RAND()*(D2-C2)+C2
- Generates a random value between the established parameters.
Cell I2: =1/1.05^H2
- Discount factor; accounts for our preference to consume now rather than later.
Cell J4: =J3*(1+$F$4)
- Accounts for the growth rate of benefits at a given percent per year.
Cell K2: =I2*J2
- The present value of costs and benefits after discounting.
Cell T1: =AVERAGE(R3:R102)
- Average NPV.
Cell T2: =STDEV(R3:R102)
- Standard deviation of NPV.
Cell T3: =MIN(R3:R102)
- Minimum NPV
Cell T4: =MAX(R3:R102)
- Maximum NPV
Normal Distributions and Bell Curves Tutorial: http://www.youtube.com/watch?v=50kZjl-7ZaQ
BCB Energy, LLC: http://www.bcb-energy.com
For free IT sample files, go to:
and click on "IT Training Initiative," and navigate to the Sample Files download page.
100% ALL original content - photos, music, lyrics, art and more!
BCB Energy, LLC and its subsidiary ArcologyDesigns are the sole creators and owners to all artwork, photographs, illustrations, graphics, logos, lyrics, texts, materials, sound recordings and musical compositions and all features of the content and materials. This includes but is not limited to the design, assortment, arrangement, atmosphere and presentation and any associated copyrights or trademarks of such content and materials.