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2. The Bakersfield Blaze is considering a three-year project that has an initial cash outflow (C0) of $300,000 and three cash inflows that are defined by the independent probability distributions shown below. All dollar figures are in thousands. Bakersfield Blaze's cost of capital is 10%.

C₁ C₂ C₃ Probability

$100 $100 $100 .25

$110 $140 $170 .50

$120 $180 $260 .25

a. Estimate the project's most likely NPV by using a point estimate of each cash flow. What is its probability? __C1=___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

b. What are the best and worst possible NPVs? What are their probabilities? ___________________________________________________________________________________________________________________________________________