wo 11. McKinsey & Company prepared a scenario analysis for the launch of new product line at Tallent Mowing Equipment. According to a McKinsey's senior analyst's preliminary results, the project will most likely generate the NPV of $500,000. In the worst case scenario, the NPV of the project is projected to be $100,000, and in the best case Scenario $700,000. The probability of the most likely scenario is 60%. The probabilities of the worst and best case scenarios is 20% each. What is the E(NPV)? a. S-50,000 b. $250,000 c. $700,000 d. $500,000 c. $420,000 12. FinTech Industries is considering a proposed project for its capital budget. The company estimates the project's NPV is $12 million. This estimate assumes that the economy and market conditions will be average over the next few yoors. The company's CFO, however, forecasts there is only a 60% chance that the economy will be average. Recognizing this uncertainty, she has also performed the following scenario analysis: Economic Scenario Recession Below average Average Above average Boom Probability of Outcome 0.05 0.10 0.60 0.15 0.10 NPV -$70 million -25 million 12 million 20 million 30 million a. -$12 million b. S12 million c. $7.2 million d. $5.3 million e. Not enough information