pls answer the following question. thanks Kingbird Enterprises is using a discounted cash flow model. Identify which model Kingbird might use to estimate the discounted fairvalue under each scenario, and calculate the fair value using the present value tables:Scenario 1: Cash flows are fairly certain$160/year for 5 yearsRisk-adjusted discount rate is 6%Risk-free discount rate is 3%(For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 2 decimal places, e.g. 5,275.25.)Scenario 1:Click here to view the factor table PRESENT VALUE OF 1.Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.Kingbird might useFair valueScenario 2:Kingbird might useFair value$Scenario 2: Cash flows are uncertain75% probability that cash flows will be $160 in 5 years25% probability that cash flows will be $95 in 5 yearsRisk-adjusted discount rate is 6%LARisk-free discount rate is 3%$✓ model.model.

There are two approaches of estimating the fair value Traditional Approach Expected cash flow…

Answered: Kingbird Enterprises is using a…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 11P

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Mendez Company has identified an investment project with the following cash flows. Year Cash Flow 1 $770 2 1,030 3 1,290 4 1,400 a. If the discount rate is 10 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value at 17 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the present value at 25 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Christie, Incorporated, has identified an investment project with the following cash flows. Year Cash Flow 1 $1,020 2 1,250 3 1,470 4 2,210 a. If the discount rate is 6 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If the discount rate is 14 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. If the discount rate is 21 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2…
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