Windsor Enterprises is using a discounted cash flow model. Identify which model Windsor 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 Scenario 2: 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 $115 in 5 years

Risk-free discount rate is 2% Risk-adjusted discount rate is 6%

Risk-free discount rate is 2%

Scenario 1:

Windsor might use : traditional approach or expected cash flow

what is the Fair value : $

Scenario 2:

Windsor might use : traditional approach or expected cash flow

what is the Fair value : $