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The goal of this study is to emphasize the use of business simulation as a learning tool in educational institutions. Generally, self-study, class lectures and case studies are used as the main pedagogy tools in the classroom. This research is focused towards exploring the perceptions of students who took a business simulation at Umeå Business School, Sweden. Empirical findings show that there is a strong positive correlation between the variables of perceiving simulation as exciting and variable of perceiving it as a fun way of learning. Positive correlation exists among variables of being excited to know about simulation in a course and variable of considering simulation being a learning experience. This means that compared to other tools there is more likeness of simulation amongst students and they perceive it as most learning tools compared to class lectures, guest lectures, self-study and group discussions. The study concluded by providing a basic model of an effective simulation which was developed in line with literature review and empirical findings from this research.