Company Tellsa is thinking of launching a new battery project which will last for the next 10 years with a cost of capital of 12%. The initial cost of the project is $12 Billion and will be depreciated to 0 salvage value on a straight line basis. The applicable tax rate is 50%. The following table presents the finance managers projections of the key input variables under different economic scenarios which will remain constant for the life of the project:

	Range
Variable	Pessimistic	Expected	Optimistic
Market Size(Mil)	0.8	1	1.4
Market Share	0.05	0.1	0.15
Unit Price	$370,000	$400,000	$430,000
Unit Var Cost	$290,000	$250,000	$220,000
Fixed Cost (bil)	$5	$3	$1.50

1. Perform a sensitivity analysis of the NPV of this project with respect to unit price using the unit price under pessimistic scenario. What happens to the NPV if the unit price changes: (Clue: Guess whether NPV will fall or increase from the nature of the variable scenario)
2. If you want to perform a scenario analysis, estimate the optimistic OCF of the same project;
3. If another manager believes that all of the key variables will change by +/- 10% over the expected case under different scenarios, what will be the best-case OCF?(clue, first estimate the key variables under the best-case)
4. When presenting this new project, the financial managers also received queries on the break-even quantities of the new product to be sold Estimate the financial break-even (quantity) for this project.(Clue: Use the base case numbers with all zeroes for the relevant variables )
5. Using the expected data from the same project what is the degree of operating leverage (DOL)?