Find the expected net present value for the following scenarios.

Scenario 1 Scenario 2 2 year project 2 year project Investment = $500,000 Investment = $500,000 Straight line depr for 2 years Straight line depr for 2 years Quantity sold = 100,000 Quantity sold = 90,000 Year zero Price = $10 Year zero Price = $10 3% inflation per year in price 2% inflation per year in price Year zero Variable cost $3 per unit Year zero Variable cost $3 per unit 2% inflation in variable cost per year 2% inflation in variable cost per year Probability = 60% Probability = 40% Tax rate = 25% Tax rate = 25% Cost of Capital = 10% Cost of Capital = 10%