Say that a project consultant was employed to forecast business conditions and calculate a range of NPV estimates. The results of the analysis are reported in the following table. Scenario Probability (%) NPV ($) Base Case 60 -150,929 Demand for iPads increases 25 53,789 Demand for iPads decreases 15 -187,490
Say that a project consultant was employed to forecast business conditions and calculate a range of NPV estimates. The results of the analysis are reported in the following table. Scenario Probability (%) NPV ($) Base Case 60 -150,929 Demand for iPads increases 25 53,789 Demand for iPads decreases 15 -187,490
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Say that a project consultant was employed to
Scenario |
Probability (%) |
NPV ($) |
Base Case |
60 |
-150,929 |
Demand for iPads increases |
25 |
53,789 |
Demand for iPads decreases |
15 |
-187,490 |
Using this information, calculate the expected NPV for the project. Based on your calculation, should the project go ahead? Explain your answer.
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