Conduct a scenario analysis. Assume the following scenarios. Scenario 1: Best-case condition the sales price increase by
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Question:
Scenario 1: Best-case condition the sales price increase by 10%, number of units sold7,000 units, variable costs per unit and fixed cost increase 5% from the original basecase value.
Scenario 2: Worst-case condition, with increase in the variable and fixed cost by 25% and with no change in the unit sales and unit price from the base value.
Calculate the Expected NPV, the Standard Deviation of the NPV and the project's coefficient of variation? The best-case scenario and the base case each have a 40% probability while the worst case has a 30% probability.
Related Book For
Accounting Texts and Cases
ISBN: 978-1259097126
13th edition
Authors: Robert Anthony, David Hawkins, Kenneth Merchant
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