a. Compute profit per unit for the base-case, worst-case, and best-case scenarios.
b. Construct a simulation model to estimate the mean profit per unit.
c. Why is the simulation approach to risk analysis preferable to generating a variety of what-if scenarios?
d. Management believes the project may not be sustainable if the profit per unit is less than $5. Use simulation to estimate the probability the profit per unit will be less than $5.