Identification of Variable Interest Entity and Primary Beneficiary Softek Corporation forms a separate legal entity, Startek, to develop new technology. The entity is funded by $4,000,000 in outside equity and $26,000,000 in debt. Softek guarantees Startek's debt. The entity is expected to generate the following cash flows at the end of one year: Cash Flow Probability $11,000,000 0.40 33,000,000 0.20 55,000,000 0.40 A discount rate of 10 percent is appropriate. Required Assume qualitative analysis of Startek's VIE status is inconclusive. Quantitatively analyze whether Startek is a variable interest entity. Instructions: Use negative signs with your answers, when appropriate. Enter $ answers in millions ($11,000,000 equals $11 million). Enter Probability answers using decimals. Expected Cash Flow 0 Present Value Probability 0 $ Expected Investment Residual Expected Expected PV Fair Value Returns Gains Losses $ os os os os 0 0 0 0 0 0 0 Identification of Variable Interest Entity and Primary Beneficiary Softek Corporation forms a separate legal entity, Startek, to develop new technology. The entity is funded by $4,000,000 in outside equity and $26,000,000 in debt. Softek guarantees Startek's debt. The entity is expected to generate the following cash flows at the end of one year: Cash Flow Probability $11,000,000 0.40 33,000,000 0.20 55,000,000 0.40 A discount rate of 10 percent is appropriate. Required Assume qualitative analysis of Startek's VIE status is inconclusive. Quantitatively analyze whether Startek is a variable interest entity. Instructions: Use negative signs with your answers, when appropriate. Enter $ answers in millions ($11,000,000 equals $11 million). Enter Probability answers using decimals. Expected Cash Flow 0 Present Value Probability 0 $ Expected Investment Residual Expected Expected PV Fair Value Returns Gains Losses $ os os os os 0 0 0 0 0 0 0