Question: Please help with this finance question and what does it mean? 152 153 c. Now conduct a scenario analysis. Assume that there is a 25%

Please help with this finance question and what does it mean?Please help with this finance question and what does it mean? 152

152 153 c. Now conduct a scenario analysis. Assume that there is a 25% probability that best-case conditions, with each of the 154 variables discussed in Part b being 20% better than its base-case value, will occur. There is a 25% probability of worst-case 155 conditions, with the variables 20% worse than base, and a 50% probability of base-case conditions. (Hint: Use Scenario 156 Manager. Go to the Data menu, choose What-If-Analyis, the choose Scenario Manager. After you create the Scenario's, 157 you can pick a scenario and type in the resulting NPV (but be sure to return the Scenario to the base-case afterward). Or 158 you can create a Scenario Summary and use a cell reference to the Scenario Summary worksheet to show the NPV for each 159 scenario.) Variable Costs per Unit Scenario Sales Price per Unit Probability Unit Sales NPV 160 161 162 163 164 165 166 167 168 169 170 171 172 173 Best Case Base Case Worst Case 25% 50% 25% 1,200 1,000 800 $28.80 $24.00 $19.20 $14.40 $18.00 $17.28 Expected NPV = Standard Deviation = Coefficient of Variation = Std Dev / Expected NPV = 152 153 c. Now conduct a scenario analysis. Assume that there is a 25% probability that best-case conditions, with each of the 154 variables discussed in Part b being 20% better than its base-case value, will occur. There is a 25% probability of worst-case 155 conditions, with the variables 20% worse than base, and a 50% probability of base-case conditions. (Hint: Use Scenario 156 Manager. Go to the Data menu, choose What-If-Analyis, the choose Scenario Manager. After you create the Scenario's, 157 you can pick a scenario and type in the resulting NPV (but be sure to return the Scenario to the base-case afterward). Or 158 you can create a Scenario Summary and use a cell reference to the Scenario Summary worksheet to show the NPV for each 159 scenario.) Variable Costs per Unit Scenario Sales Price per Unit Probability Unit Sales NPV 160 161 162 163 164 165 166 167 168 169 170 171 172 173 Best Case Base Case Worst Case 25% 50% 25% 1,200 1,000 800 $28.80 $24.00 $19.20 $14.40 $18.00 $17.28 Expected NPV = Standard Deviation = Coefficient of Variation = Std Dev / Expected NPV =

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