home / study / business / finance / finance questions and answers / scenario analysis automated food distribution corp. (afdc) produces vending machines and places ... Question: Scenario analysis Automated Food Distribution Corp. (AFDC) produces vending machines and places t... Scenario analysis Automated Food Distribution Corp. (AFDC) produces vending machines and places them in public buildings. The company has obtained permission to place one of its machine in a local library. The company makes two types of machines. One distributes soft drinks, and the other distributes snack foods. AFDC expects both machines to provide benefits over a 12-year period, and each has a required investment of $2900. THe firm uses a 10.7% cost of capital. Management has constructed the following table of estimates of annual cash inflows for pessimistic, most likeyl, and optimistic results. soft drink snack food Initial investment $2900 2,900 outcome annual cash flows annual cash flows pessimistic $500 $400 MOst likely Optimistic 750 1010 750 1220 a. Determine the range of annual cash inflows for each of the two vending machines. b. Construct a table of the NPVs associated with each outcome for both machines. c. Find the range of NPVs, and subjectively compare the risks associated with these machines