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Problem 10.9 Scenario Analysis (LO3) The most likely outcomes for a partculat project ore estimated as follows: However, you recognite that some of these estimates

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Problem 10.9 Scenario Analysis (LO3) The most likely outcomes for a partculat project ore estimated as follows: However, you recognite that some of these estimates are subject to enror. Suppose that each variable may turn out to be elther tos higher of 10x lower than the initiel estimate. The project will last for 10 years and requires an initial investment of $14mili ion, which will be depreciated straighteline over the project life to a fasal value of tera. The firms tax iate is 27x and the required rate of return is 14x. (For all the requirements, a negative amount should be indicated by a minus vign. Enter your answer in dotiars not in militons. Do not round intermediate calculations. Pound your answer to the nearest dollat amount) a. What is project NPV in the best-case vcenaria, that is, asuuming al vsiables take on the beit possible value? b. What is project NPV in the worttcase scenario? Problem 10.9 Scenario Analysis (LO3) The most likely outcomes for a partculat project ore estimated as follows: However, you recognite that some of these estimates are subject to enror. Suppose that each variable may turn out to be elther tos higher of 10x lower than the initiel estimate. The project will last for 10 years and requires an initial investment of $14mili ion, which will be depreciated straighteline over the project life to a fasal value of tera. The firms tax iate is 27x and the required rate of return is 14x. (For all the requirements, a negative amount should be indicated by a minus vign. Enter your answer in dotiars not in militons. Do not round intermediate calculations. Pound your answer to the nearest dollat amount) a. What is project NPV in the best-case vcenaria, that is, asuuming al vsiables take on the beit possible value? b. What is project NPV in the worttcase scenario

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