Question: Question 2 of 18 0.5 / 1 E Your answer is partially correct. Shamrock, Inc. is using a discounted cash flow model. Scenario 1: Cash

 Question 2 of 18 0.5 / 1 E Your answer is

Question 2 of 18 0.5 / 1 E Your answer is partially correct. Shamrock, Inc. is using a discounted cash flow model. Scenario 1: Cash flows are fairly certain Scenario 2: Cash flows are uncertain $260/year for 5 years 75% probability that cash flows will be $260 in 5 years Risk-adjusted discount rate is 6% 25% probability that cash flows will be $100 in 5 years Risk-free discount rate is 3% Risk-adjusted discount rate is 6% Risk-free discount rate is 3% Identify which model Shamrock might use to estimate the discounted fair value under each scenario, and calculate the fair value. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 2 decimal places, e.g. 5,275.25.) Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Scenario 1: Shamrock might use traditional approach model. Fair Value $ Scenario 2: Shamrock might use expected cash flow model. Fair Value $

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