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10-9 Scenario Analysis (LO3) The most likely outcomes for a particular project are estimated as follows: Unit price: $ 50 Variable cost: $ 30 Fixed

10-9 Scenario Analysis (LO3) The most likely outcomes for a particular project are estimated as follows: Unit price: $ 50 Variable cost: $ 30 Fixed cost: $ 400,000 Expected sales: 39,000 units per year However, you recognize that some of these estimates are subject to error. Suppose each variable turns out to be either 10% higher or 10% lower than the initial estimate. The project will last for 10 years and requires an initial investment of $1.5 million, which will be depreciated straight-line over the project life to a final value of zero. The firms tax rate is 21%, and the required rate of return is 12%. What is project's NPV in the best-case scenario, that is, assuming all

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