Marin Enterprises is using a discounted cash flow model . Identify which model Marin might use to estimate the discounted fair value under each scenario , and calculate the fair value using the present value tables : Scenario 1 : Cash flows are fairly certain $ 110 / year for 5 years Risk - adjusted discount rate is 5 % Risk - free discount rate is 4 % Scenario 2 : Cash flows are uncertain 75 % probability that cash flows will be $ 110 in 5 years 25 % probability that cash flows will be $ 90 in 5 years Risk - adjusted discount rate is 5 % Risk - free discount rate is 4 %

Scenario 1 : Marin might use: traditional approach Fair value: 476.25 Scenario 2 : Marin might use: expected cash flow Fair value: ??? I have an answer for the fair value of Scenario 2 being 454.60 but my assignment keep telling me wrong. Plz help me with the fair value for scenario 2