Question

Problem 2 The expected costs and revenues for a project are shown below. The investment cost could be off by ±30%. The operating costs could be off by ±5%, and the

revenue could be off by ±15%. Determine the NPV for both the best-case scenario and the worst-case scenario. Year Investment Operating Cost Revenue 0 (2,000) 1 (1,400) (1,000) 2,000 2 (800) 2,000 3 (800) 2,000 4 (800) 2,000 5 (800) 2,000

Fig: 1