Run simulation creating a sample of computer scenarios based on inputs from the probability distributions and with respect to any correlation conditions set.
Analyse results generated in the simulation run, calculating statistical measures and plotting probability distribution graphs of the results, which indicate all the potential outcomes and their likelihood of occurrence.
Case 3: Probability of zero NPV greater than 0 and less than 1
Case 4: Mutually exclusive projects (given the same probability, one project always shows a higher return) Case 4: Non‑intersecting cumulative probability distributions of project return for mutually exclusive projects
Case 5: Mutually exclusive projects (high return vs. low loss) Case 5: Intersecting cumulative probability distributions of project return for mutually exclusive projects
Expected Loss Ratios: Example of project outcomes expected value of project Expected value of losses Expected value of gains