Question

iN eXCEL

7. Jim’s Discount Warehouse sells three-year extended warrantees on its televisions and other electronics. As of December 31, 2019, Jim’s estimates expected cash flows associated with electronics sold to date as follows for the next three years:

	Cash Flow Estimate	X	Probability Assessment	=	Expected Cash Flow
2020	$15,000		0.25		$3,750
	20,000		0.40		8,000
	27,000		0.35		9,450
			Total		21,200
2021	20,000		.35		7,000
	22,500		.35		7,875
	30,000		.30		9,000
					23,875
2022	30,000		.25		7,500
	35,000		.25		8,750
	40,000		.50		20,000
					36,250

Answer 1