Summarize the problems that a manager would encounter in interpreting a standard sensitivity analysis, such as the one shown in Table 10.2. Which of these problems are alleviated by examining the project under alternative scenarios?

NPV, V Billions Range Expected 1 million Variable Pessimistic Optimistic 1.1 million .16 380,000 275,000 2 billion Expected Optimistic Pessimistic 9 million 04 Market size Market share Unit price Unit variable cost Fixed cost +3.4 +3.4 +3.4 +3.4 +3.4 +5.7 +17.3 +5.0 +1.1 -10.4 -4.2 -15.0 +.4 .1 350,000 375,000 300,000 +11.1 +6.5 4 billion 3 billion