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MONTE CARLO METHOD IS USED TO A. Compare two mutually exclusive projects B. Simulate the probability distribution function of a project's performance measure C. Simulate affects of inflation D. Set up a decision tree E. Derive priority weights for various alternatives

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Final answer:

The Monte Carlo method refers to a statistical technique that uses random sampling and statistical analysis to compute the probabilities of different outcomes in a situation that cannot easily be predicted due to random variables, mostly used to simulate the probability distribution function of a project's performance measure.

Step-by-step explanation:

The Monte Carlo method is commonly used in business, especially in risk analysis and decision-making processes. Among the options provided in your question, the most accurate description of Monte Carlo method's use would be to B. Simulate the probability distribution function of a project's performance measure. This method uses random sampling and statistical analysis to compute the probabilities of different outcomes in a process that cannot easily be predicted due to the intervention of random variables. It's a simulation technique that's designed to understand the impact of risk and uncertainty in prediction and forecasting models.

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User Msgre
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Answer:

B. Simulate the probability distribution function of a project's performance measure.

Step-by-step explanation:

User Zyy
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