a. Calculate the project's NPV under each of the following sets of assumptions: (1) the best-case

scenario (use the high estimates - unit price 10% above expected, variable costs 10% less than

expected, fixed costs 10% less than expected, and unit sales 10% higher than expected), (2) the base

case using expected values, and (3) the worst-case scenario.

b. Given your estimates of the range of NPVs for the investment, what is your assessment of the

investment's potential?

c. What are the limitations of this type of scenario analysis? (Hint: What are the chances that all

variables will deviate from their expected values in a best- or worst-case scenario?