a Define risk for a project with a (1) best case scenario providing a 20% return and a 10% probability, (2) a most likely scenario consisting of a 12% IRR and a 70% probability of occurring, and (3) a worst case scenario with a 20% likelihood of returning a −6% IRR.

b Define risk for a project with a (1) best case scenario providing a 27% return and a 15% probability, (2) a most likely scenario consisting of a 12% IRR and a 60% probability of occurring, and (3) a worst case scenario with a 25% likelihood of returning a −13% IRR.