Jannie Company estimates two scenarios of possible future accounts receivable uncolectibles and the probability of each not being collected in the next year. The risk- free rate is 4%. For each of the scenarios, compute the expected cash flow value based on the probabilities given. Compare the expected cash flows on each case.

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Scenario 1 Scenario 2 Estimated Loss $52,000 55,000 60,000 65,000 Probability 20% 25% 25% 30% Estimated Loss $52,000 55,000 60,000 65,000 Probability 30% 25% 25% 20%