methods of uncertainty reduction

Question 1

what is market research 2

Answer 1

1. primary research - this is customized to you but expensive
2. secondary information- cheap but not customized to you

Question 2

what is the use of a simulation

Answer 2

computers can run thousands of simulations a second and predict what range of outcomes an investor could achieve based on their investment

Question 3

what is sensitivity analysis

Answer 3

if one thing is changed (e.g sp, vc,fc etc) how will your overall outcome be changed

Question 4

how to calculate the sensitivity analysis

Answer 4

outcome we are looking for / variable we are changing

this will give a percentage and we can see that if the outcome we are looking for drops by the caklcuklate amount, we will start too make losses