2.. Perform scenario analysis on the following project by first finding the NPV for the base case, then for the worst case and best case.
Base Case
Investment = $100,000 Straight line depreciation
over 2 years no salvage value
quantity sold per year = 20,000
Price per unit = $10 at time zero 4% inflation per year (price)
Operating Cost = $5 per unit (all variable) at time zero 2% inflation per year (cost)
Tax rate 25% cost of capital 10%
Project will have a 2 year life
Worst Case - Same information as base case but assume quantity sold of 14,000
Best Case - Same information as base case but assume quantity sold of 26,000
2.. Perform scenario analysis on the following project by first finding the NPV for the base...
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