a) Simulation deals with only formulas while profit model does not deal with formulas.
b) Simulation has all inputs known while profit model does have all knows inputs.
c) Profit model deals with only formulas while simulation does not deal with formulas
d) Profit model has all the inputs known with certainty while simulation is used when inputs are uncertain.
1 answer
The correct answer is:
d) Profit model has all the inputs known with certainty while simulation is used when inputs are uncertain.
In general terms, a profit model is typically used to project financial outcomes based on known variables and fixed inputs, while simulation models account for uncertainty and variability in inputs to analyze different scenarios and outcomes.
