Simpkins Trucking of Mount Isa, Queensland, is considering the acquisition of Armour Transport. Simpkins has analysed the annual cash flows for Armour Transport and come up with these estimates for each of the three states of the economy shown here:

Scenario I Scenario II Scenario III State of the Elcoom'glr Reoeaion Normal Expanoion Pro babi] ity' 15%. ED'% 25%- Cash How -$55 D $151,000 $245