The distribution of financial metrics of your model can be calculated using Monte Carlo simulation. After you specify the estimates for cost, benefit and variables in your model, you can run the simulation. A simulation is always run when Investment analysis is launched with automatic recalculation is turned on. This ensures that the data displayed in the graph and the data in the Estimates tab are synchronized, even when data or streams are changed in grid mode. By default, the calculator will automatically recalculate simulation values and graph NPV results for 10,000 samples.
Procedure
1 Launch Investment analysis.
2 Open the Calculator tab or Variables tab based on your requirement.
3 Click Run Simulation.
4 Specify whether the values should be recalculated automatically by selecting or clearing Auto recalc.
▪ Select Auto recalc: Ensures that the data is up-to-date but slows down the performance. If many calculator tapes are used, time taken to load IA is longer because the values are recalculated on startup. A possible solution is to rerun all calculator tapes if Auto recalc for variables is enabled.
▪ Clear Auto recalc: Specify manual recalculation to explicitly run the simulation to recalculate the data. Note: A fading graph indicates that you need to run the simulation again.
5 Select Graph results, and select the number of samples.
For a smooth NPV curve, select larger sample sizes.
