Find the distribution of the NPV of profit

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Problem - For the Hyde Park Surgery Center scenario described in Problem 22 in Chapter 8, suppose that the following assumptions are made. The number of patients served the first year is uniform between 1,300 and 1,700; the growth rate for subsequent years is triangular with parameters (5%, 8%, 9%), and the growth rate for year 2 is independent of the growth rate for year 3; average billing is normal with mean of $150,000 and standard deviation $10,000; and the annual increase in fixed costs is uniform between 5% and 7% and independent of other years. Find the distribution of the NPV of profit over the 3-year horizon and analyze the sensitivity and trend charts. Summarize your conclusions.

Reference no: EM132759128

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