question archive Willie Winn Track Shoes used the expected cash flow approach to determine the present of a future obligation to be paid to Betty Will Company in four years
Willie Winn Track Shoes used the expected cash flow approach to determine the present of a future obligation to be paid to Betty Will Company in four years
Subject:FinancePrice: Bought3
Willie Winn Track Shoes used the expected cash flow approach to determine the present of a future obligation to be paid to Betty Will Company in four years. Estimated future payment possibilities were as follows:Possible payment Probability $100 million 20% 140 million 40% 180 million 40%The risk-free interest rate is 5%. The present value of $1 in 4 periods at 5% is 0.82270. What is the estimated present value of the future obligation?
