In the existent world of continuous production systems, strong attention has been waged
to anonymous risk that probably generates significant apprehension. The forecast for net
present value is extremely important for any production plant. The objective of this paper
is to implement Monte Carlo simulation technique for perceiving the impact of risk and uncertainty
in prediction and forecasting company’s profitability. The production unit under
study is interested to make the initial investment by installing an additional spray dryer
plant. The expressive values acquied from the Monte Carlo technique established a range of
certain results. The expected net present value of the cash flow is $14,605, hence the frequency
chart outcomes confirmed that there is the highest level of certainty that the company
will achieve its target. To forecast the net present value for the next period, the results
confirmed that there are 50.73% chances of achieving the outcomes. Considering the minimum
and maximum values at 80% certainty level, it was observed that 80% chances exist
that expected outcomes will be between $5,830 and $22,587. The model’s sensitivity results
validated that cash inflows had a greater sensitivity level of 21.1% and the cash inflows for
the next year as 19.7%. Cumulative frequency distribution confirmed that the probability
to achieve a maximum value of $23,520 is 90 % and for the value of $6,244 it is about 10 %.
These validations suggested that controlling the expenditures, the company’s outflows can
also be controlled definitely.