Willie Winn Track Shoes used the expected cash flow approach to determine the present of a future obligation to be paid to Betty Will Company in four years. Estimated future payment possibilities were as follows:
Possible payment Probability
$100 million 20%
140 million 40%
180 million 40%
The risk-free interest rate is 5%. The present value of $1 in 4 periods at 5% is 0.82270. What is the estimated present value of the future obligation?