r
Simulation 327FIGURE 10-8 Excel spreadsheet for
simulation (N=25).Note for students who have had a course in probability and statistics:Creating the random
values for life and first cost is done as follows. Select a random number in [0, 1) using Excel's
RAND function:,This is tlte Val~eof the ~ug1Ulati,yedi~tributionfunctionfor .thevariable. Convert
this to the variable's value by using an inverse function from Excel, or build the inverse function.
For the discrete uniform life the function is=.minlife +INT(tange* RANDO).For the normally
"distributed first C()st the,functions is<-NORMINY(RANDO, mean, standard deviation). ~
-- ------ -- -.. - - .. -. - - - -- ---A B C D(^1250) Annual Savings
2 Life First Cost
3 Min 12 1500 Mean
4 Max 16 150 Std dev
5
6 Iteration IRR
(^71121277) 16.4%
(^82151546) 13.9%
9 3 12 1523 12.4%
10 4 16 1628 13.3%
(^115141401) 15.5%
(^126) I^121341 15.2%
13 7 12 1683 10.2%
(^148141193) 19.2%
(^159151728) 11.7%
16 10 12 1500 12.7%
17 11 16. 1415 16.0%
18 12 12 1610 11.2%
19 13 15 1434 15.4%
20 14 12 1335 15.4%
21 15 14 1468 14.5%
22 16 13 1469 13.9%
23 17 14 1409 15.3%
(^2418151484) 14.7%
(^2519141594) 12.8%
26 20 15 1342 16.8%
(^2721141309) 17.0%
(^2822121541) 12.1%
29 23 16 1564 14.0%
30 24 13 1590 12.2%
31 25. 16 1311 17.7%
32
33 Mean 14 1468 14.4%
(^34) Std dev 2 135 2.2%