Question

Calculate the NPV based on the scenarios in the table below:

Scenario	Boom	Average	Weak	Bust
Probability	0.15	0.40	0.35	0.10
Units Sold	1,000	750	500	250
Unit Selling Price	$11	$10	$8	$5
Revenue	______	______	______	______
Variable Cost % of Revenue	55%	50%	45%	30%
Variable Cost	______	______	______	______
Fixed Cost	1,000	1,000	1,000	1,000
Total Cost
Profit (Loss) = A	______	______	______	______
NPV Factor = B	3.25	3.25	3.25	3.25
NPV = A * B =	______	______	______	______

Notes:         1. You do not need a discount rate because it is part of the NPV factor.

         2. You will need to fill in the blanks in order to do this calculation.

        NPV = __________

Answer 1

Solution :

Total NPV = $ 6,825

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.