Which of the following is not a drawback of the simulation approach?

A) The probability distributions of the cash flows are subjective estimates.
B) It can be very difficult to access and use a simulation program.
C) Cash flows in successive periods tend not to be independent.
D) There are no clear guidelines on how to interpret the results.

Simulation Approach

A method of problem-solving that uses computer models to simulate real-world processes and systems to predict outcomes.

Probability Distributions

Formulas that enumerate all conceivable outcomes and their chances for a random variable within a designated span.

Interpretation

The process of providing explanation or meaning to a concept, statement, or set of data.