5. Time Value of Money (10 points) Square One Inc. is currently using a discounted cash flow model. Scenario 1: Cash flows are fairly Scenario 2: Cash flows are uncertain certain $480/year for 5 years Risk-adjusted discount rate is 8% 75% probability that cash flows will be $480 in 5 years 25% probability that cash flows will be $220 in 5 years Risk-adjusted discount rate is 8% Risk-free discount rate is 3% Risk-free discount rate is 3% Required: Identify which model Squire One Inc. might use to estimate the discounted fair value under each scenario, and calculate the fair value. (Note: 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.) (10 points)