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The most likely outcomes for a particular project are estimated as follows: Unit price: $ 5 0 Variable cost: $ 3 0 Fixed cost $

The most likely outcomes for a particular project are estimated as follows: Unit price: $50 Variable cost: $30 Fixed cost $430,000 Expected sales: 42,000 units per year However, you recognize that some of these estimates are subject to error. Suppose each variable turns out to be either 10% higher or 10% lower than the initial estimate. The project will last for 10 years and requires an initial investment of $1.9 million, which will be depreciated straight-line over the project life to a final value of zero. The firm's tax rate is 21%, and the required rate of return is 10%. A) What is project's NPV in the best-case scenario, that is, assuming all variables take on the best possible value? B) What is project's NPV in the worst-case scenario?

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