The Great Pine Forest Corporation is analyzing an expansion project with the following information:
Initial investment:........................................$120,000
Depreciation life:...........................5 years-straight-line
Project life:...................................................5 years
Additional working capital at t = 0.....................$20,000
Working capital returned at t = 5.......................$20,000
Expected salvage value at t = 5.........................$15,000
I 'ax rate:................................................34 percent
(lost of capital:..........................................12 percent

a. Calculate the NPV of this project.
b. Now conduct a scenario analysis as follows:
1. Assume the best case to have revenue 10 percent higher than just stated, costs 5 percent lower than given, and salvage value twice the amount given.
2. Assume the worst case to have revenue 10 percent lower than given, costs 5 percent higher than given, and salvage value to be 0.
Show the results for the best case, the most likely case, and the worst case.

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Year 2Year 3 Year 4 Year5 Revenue $50,000 $80,000 $80,000 $80,000 $40,000 Cash costs 0,000 80,000 25,000 25,000 25,000