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In this project, we determine if setting up a business would be profitable 15 years down the line, subject to 9 inputs, each associated with a fixed uncertainty. Following are the inputs which we consider and their specifications-
To calculate the Cash Flow (CF) for a particular year, we will use the formula-
CF= (1-t)(S-C) + D - CTDC - CWC - Cland - Cstartup - Croyalty + Vsalvage (+ CWC)
Using Monte Carlo simulation, we iterate through a fixed number of scenarios, to determine what percent of scenarios result in a positive NPV (Net Present Value)-
The user can also change the parameters using the userform displayed after clicking on 'Run Simulation' on the excel sheet-
We then plot a histogram to get a 1-stop view of the distribution of the NPV as a consolidation of all the scenarios-
