What is the NPV of the project in the bad scenario?

The capital budgeting for the new phone required us to make assumptions about the quantity of new and old phones that will be sold, their price, and their cost of production. The values we attributed may turn out to be the right ones. However, there is a sizeable probability that the true ones are much different. What if we are wrong? Should we accept or reject the project? One way to address this issue is to perform a scenario analysis. For this, we name the outcome of the assumptions already made the standard scenario. Then, we re-do the capital budgeting for the case the market is in our favor and in case it is against us. We call these the good and the bad scenario, respectively. In the good scenario, we can assume the sales and prices of the new phone will be higher than in the standard one, while in the bad scenario it will be the opposite. You may relate the good scenario with the case the economy goes to a boom, and the bad one if the economy ehters a recession. Finally, we attribute a probability for each one of the three scenarios to happen and calculate the expected value. Based on the latter we make our final decision to accept or reject it. In the bad scenario, the economy is in a recession, and Concha Electronics will sell fewer new phones at lower prices, and fewer customers will buy the new phone in place of the old one. What is the NPV of the project in the bad scenario? The number of new phones to be sold is 40% lower for every single year of its life; and The price charged is $550, and The lost sales of old phones decrease by 20%. All other assumptions do not change from the standard scenario. Round the answer to an integer, i.e., no decimals (cents) Do not include the dollar sign Your Answer: Answer The capital budgeting for the new phone required us to make assumptions about the quantity of new and old phones that will be sold, their price, and their cost of production. The values we attributed may turn out to be the right ones. However, there is a sizeable probability that the true ones are much different. What if we are wrong? Should we accept or reject the project? One way to address this issue is to perform a scenario analysis. For this, we name the outcome of the assumptions already made the standard scenario. Then, we re-do the capital budgeting for the case the market is in our favor and in case it is against us. We call these the good and the bad scenario, respectively. In the good scenario, we can assume the sales and prices of the new phone will be higher than in the standard one, while in the bad scenario it will be the opposite. You may relate the good scenario with the case the economy goes to a boom, and the bad one if the economy ehters a recession. Finally, we attribute a probability for each one of the three scenarios to happen and calculate the expected value. Based on the latter we make our final decision to accept or reject it. In the bad scenario, the economy is in a recession, and Concha Electronics will sell fewer new phones at lower prices, and fewer customers will buy the new phone in place of the old one. What is the NPV of the project in the bad scenario? The number of new phones to be sold is 40% lower for every single year of its life; and The price charged is $550, and The lost sales of old phones decrease by 20%. All other assumptions do not change from the standard scenario. Round the answer to an integer, i.e., no decimals (cents) Do not include the dollar sign Your