Management is assessing the future cash flows in relation to an entity's assets, and considers that there are two possible scenarios for future cash flows. The first, for which there is a 70% probability of occurrence, would provide future cash flows of $5 million. The second, which has a probability of occurrence of 30%, would provide future cash flows of $8 million. Management has decided that the calculation of value in use should be based on the most likely scenario, namely the one that will produce cash flows of $5 million. 

Required 

Evaluate management's decision.

Answer rating: 100% (QA)

Evaluation of Management decisions In the given case the management ... View the full answer