(3) Use the worst-, base-, and best-case NPVs and probabilities of occurrence to find the project’s expected NPV, as well as the NPV’s standard deviation and coefficient of variation.

l. Are there problems with scenario analysis? Define simulation analysis, and discuss its principal advantages and disadvantages.

m. (1) Assume Shrieves’s average project has a coefficient of variation in the range of 0.2 to 0.4. Would the new line be classified as high risk, average risk, or low risk? What type of risk is being measured here?