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Shao industries is considering 2 proposed projects for its capital budget. The company estimates the project A's NPV is $20 million and the Project B's
Shao industries is considering 2 proposed projects for its capital budget. The company estimates the project A's NPV is $20 million and the Project B's NPV $ 25 million. This estimate assumes that the economy and market conditions will be average over the next few years. The company's CFO, however, forecasts there is only a 40% chance that the economy will be average. Recognizing this uncertainty, she has also performed the following scenario analysis:
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