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Intangible Asset Valuation

Uncertainty & Sensitivity

valuation_simulation
Read-onlyIdempotent

Quantify uncertainty in intangible asset valuations using Monte Carlo simulations, sensitivity ranking, and decision-tree expected values.

Instructions

Uncertainty analysis: Monte Carlo valuation, Monte Carlo sensitivity ranking, decision-tree expected values, and one-at-a-time sensitivity analysis. Method selects the formula. Use to quantify and stress the uncertainty around a point valuation; monte_carlo simulates all listed inputs, monte_carlo_sensitivity ranks the drivers. For a single deterministic point value use the relevant valuation tool; sensitivity_analysis varies one parameter of a core function only. Per method: monte_carlo needs input_distributions (optional: iterations, seed); monte_carlo_sensitivity needs base_params + distributions (optional: iterations, seed); decision_tree needs tree; sensitivity_analysis needs function_name + parameter_name + parameter_range + fixed_parameters. monte_carlo_sensitivity requires iterations between 1000 and 100000. Only method is required; all other parameters are method-dependent — supply those the selected method names and omit the rest (defaults apply where defined). Rates and premiums are decimals (0.10 = 10%). Pure arithmetic: no I/O and no external calls, rounded to 2 decimals; parameters belonging to other methods are accepted and ignored. An unknown method, or a missing method-required parameter, returns an error instead of a value.

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
seedNoRandom seed (integer ≥ 0) for reproducible simulations.
treeNoDecision tree {"nodes": [...], "edges": [...]}; node types decision, chance, terminal.
methodYesFormula to apply. Options: monte_carlo = Simulate all listed inputs, sum-based valuation.; monte_carlo_sensitivity = Rank parameters by their impact on the valuation.; decision_tree = Backward induction over a decision tree.; sensitivity_analysis = One-at-a-time sensitivity of a core function.
iterationsNoSimulation iterations; monte_carlo_sensitivity requires 1000-100000.
base_paramsNoBase values for all parameters, including those held fixed.
distributionsNoMap of parameter name to {distribution, params} for the simulated inputs.
function_nameNoCore function to vary, e.g. "present_value", "capm_discount_rate", "wacc".
parameter_nameNoName of the parameter to vary.
parameter_rangeNoValues to test for the varied parameter.
fixed_parametersNoValues for all other parameters, held constant.
input_distributionsNoInputs to simulate, each {name, distribution, params}; distribution is normal (mean, std), uniform (low, high) or triangular (low, high, mode).

Output Schema

TableJSON Schema
NameRequiredDescriptionDefault
errorNoError message when the call fails.
stepsNoIntermediate calculation steps for traceability (one string per step).
valueYesComputed valuation, rate, or metric.
methodNoFormula / method name that produced the result.
assumptionsNoModelling assumptions applied (list of strings or key/value object).
defaults_appliedNoOptional parameters that were not supplied, so their documented defaults were used.
formula_referenceNoMathematical formula or reference applied.

Schema Changelog

Changes observed during successful MCP inspections.

  1. Changed1 schema field changedv2.1.1
    • addedOutput schema / properties / defaults_applied
      Added value: +{
      +  "description": "Optional parameters that were not supplied, so their documented defaults were used.",
      +  "items": {
      +    "type": "string"
      +  },
      +  "type": "array"
      +}
  2. Changed1 schema field changedv2.0.1
    • changedInput schema / properties / seed / description
      Previous value: -"Random seed for reproducible simulations."New value: +"Random seed (integer ≥ 0) for reproducible simulations."
  3. Changed2 schema fields changedv0.1.4
    • changedOutput schema / properties / steps / description
      Previous value: -"Intermediate calculation steps for traceability."New value: +"Intermediate calculation steps for traceability (one string per step)."
    • removedOutput schema / properties / steps / items / type
      Removed value: -"object"
  4. First observedv0.1.0

TDQS

A4.6/5.0
Behavior3/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already declare readOnlyHint, idempotentHint, openWorldHint=false and destructiveHint=false, so the safety profile is covered. The description still earns credit by adding non-obvious behavior: 'Pure arithmetic: no I/O and no external calls, rounded to 2 decimals,' the decimal convention for rates, the 1000-100000 iteration constraint for monte_carlo_sensitivity, and that unknown/missing-required-method inputs return an error rather than a value. This is useful context but not exhaustive (e.g. no detail on error shape or output rounding edge cases).

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness5/5

Is the description appropriately sized, front-loaded, and free of redundancy?

Dense but front-loaded and well-organized: purpose first, then routing, then per-method parameter requirements, then conventions and error behavior. Every sentence carries distinct information (which method, which params, what defaults, what fails), with no filler.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

For an 11-parameter, method-branching tool with an output schema present, the description covers the conditional parameter contract, decimal conventions, iteration bounds, default behavior for unused params, and failure modes. Nothing an agent needs to select a method and supply the right inputs is missing, and return-value explanation is correctly left to the output schema.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters5/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Although schema description coverage is 100%, the description goes well beyond the schema by mapping which parameters each method requires (e.g. monte_carlo needs input_distributions; decision_tree needs tree; sensitivity_analysis needs function_name + parameter_name + parameter_range + fixed_parameters), clarifying that only method is required and the rest are method-dependent, and stating the decimal-rate convention and iteration bounds. That conditional cross-parameter logic is not derivable from the flat schema alone.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description opens with a specific resource ('Uncertainty analysis') and enumerates the four concrete methods (Monte Carlo valuation, sensitivity ranking, decision-tree EVs, one-at-a-time sensitivity), so the agent knows exactly what computation this tool performs. It also distinguishes itself from siblings by directing deterministic point valuations to 'the relevant valuation tool'.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines5/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

Explicit routing: 'Use to quantify and stress the uncertainty around a point valuation,' contrasted with 'For a single deterministic point value use the relevant valuation tool,' and 'sensitivity_analysis varies one parameter of a core function only.' It also states the when-not condition for each method and notes params of other methods are ignored, leaving nothing to inference.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.