=+P12–4 Basic scenario analysis Aluminum Projects is in the process of evaluating two new aluminum cutting machines with the intention of purchasing one of them. The firm’s financial analysts have developed pessimistic, most likely, and optimistic estimates of the annual cash inflows for the two machines, which are shown in the following table.

Machine A Machine B Initial investment (CF0) $5,000 $5,500 Outcome Annual cash inflows (CF)

Pessimistic $550 $850 Most likely $950 $1,050 Optimistic $1,350 $1,200 Generic multivitamin Blend of A, C, and D Initial investment (CF0) 2CHf 520,000 2CHf 520,000 Outcome Annual cash inflows (CF)

Pessimistic 50 40 Most likely 75 75 Optimistic 100 120