Simulation and Risk Analysis Case Study
fibianny
MIS-665-RS-Topic-3-Case-Study-Template.xlsxRNG Data
| Mean | Std Dev | |||
| Rev. Growth % | 9.9% | 1.4% | (normally distributed) | |
| Labor Growth % | 3.5% | 1.0% | (normally distributed) | |
| Materials | SG&A | |||
| Growth % | Prob. | Growth % | Prob. | |
| 4.0% | 0.10 | 15.0% | 0.05 | |
| 5.0% | 0.15 | 16.0% | 0.10 | |
| 6.0% | 0.15 | 17.0% | 0.20 | |
| 7.0% | 0.25 | 18.0% | 0.25 | |
| 8.0% | 0.25 | 19.0% | 0.20 | |
| 9.0% | 0.10 | 20.0% | 0.20 | |
| Overhead | ||||
| Growth % | Prob. | Tax Rate | Prob. | |
| 2.0% | 0.20 | 30.0% | 0.15 | |
| 3.0% | 0.35 | 32.0% | 0.30 | |
| 4.0% | 0.25 | 34.0% | 0.30 | |
| 5.0% | 0.20 | 36.0% | 0.25 | |
| Prob. that Bose | ||||
| enters the market: | 0.5 |
The Sounds Alive Company
Model
| Growth Assumptions | Competition Assumptions | ||||
| Gross Revenues | Competition? | 0 | |||
| Labor | Revenues if Yes | 4000 | |||
| Materials | Revenues if No | 6000 | |||
| Overhead | |||||
| Tax Rate | |||||
| SG&A Rate | |||||
| 2015 | 2016 | 2017 | 2018 | Total | |
| Gross Revenues | $6,000 | $6,000 | |||
| Less R&A | $120 | ||||
| Net Revenues | $5,880 | ||||
| Less Labor | $995 | $995 | |||
| Materials | $915 | $915 | |||
| Overhead | $1,536 | $1,536 | |||
| Cost of Goods Sold | $3,447 | ||||
| Gross Profit | $2,433 | $0 | |||
| SG&A | $0 | $0 | |||
| Profit Before Tax | $2,433 | $0 | |||
| Taxes | $0 | ||||
| Profit After Tax | |||||
| NPV | |||||
| E( Profit After Tax ) | |||||
| E( NPV ) | |||||
| P( NPV > $5M ) | |||||
| Note: All values are in thousands of dollars |
The Sounds Alive Company
