The following four investment cases are missing the value of one key argument. Solve for the unknown argument in each separate case. Assume interest is compounded annually

			Investment 1		Investment 2		Investment 3		Investment 4
	RATE	(a)	??		6%		6%		5%
	NPER		8	(b)	??		4		3
	PV		$(16,000)		$(15,468)	(c)	??		$(20,000)
	FV		$24,000		$20,700		$7,800	(d)	??

Expected Cash Flow Technique

Laurel Inc. is estimating legal costs related to an environmental remediation anticipated in 10 years. Due to uncertainties related to legal services required at that time, the company prepared the following estimates.

Legal Cash Outflow	Probability
$500,000	40%
400,000	30%
200,000	20%
100,000	10%

a. Compute the expected cash outflow for legal costs.
b. Assuming a 4% risk-free rate, determine the fair value measurement of the remediation liability using the expected cash flow technique, discounting expected cash flows using a risk-free rate.

Answer rating: 100% (QA)

For Investment Case 1 Given Rate a Unknown NPER 8 PV 16000 FV 24000 We can use the formula for futur... View the full answer