AssumethatSidneyJohnsonisconfidentofherestimatesofallthevariablesthataf- fect the projects cash flows except unit sales and sales price: If product acceptance is poor, unit sales would be only 800 units a year and the unit price would only be $160; a strong consumer response would produce sales of 1,200 units and a unit price of $240. Sidney believes that there is a 25% chance of poor acceptance, a 25% chance of excellent acceptance, and a 50% chance of average acceptance (the base case).

(1) What is scenario analysis? (2) What is the worst-case NPV? The best-case NPV? (3) Use the worst-, base-, and best-case NPVs and probabilities of occurrence to find

the projects expected NPV, as well as the NPVs standard deviation and coeffi-

cient of variation.