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
- Launch Investment analysis.
- Open the Calculator tab or Variables tab
based on your requirement.
- Click Run Simulation.
- 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.
- Select Graph results, and select
the number of samples.
Tip: For a smooth NPV
curve, select larger sample sizes.