Ex 1				
	Restoration costs	Probability	Weighted outcome	
Scenario A	" 200,000 "	55%	" 110,000 "	
Scenario B	" 275,000 "	45%	" 123,750 "	
Total			" 233,750 "	FV
			" 116,215 "	PV
				
Adjustment for uncertainty	5%			
Risk-free rate	10%			
Discount factor	15%			
				
				
Ex 2				
Total number of goods sold		1000 units		
				
	Probability	Repair costs (unit)	Number of returned goods	Weighted outcome
No defect	75%	0	0	 -   
Minor defect	20%	100	200	" 20,000 "
Major defect	5%	400	50	" 20,000 "
Total warranty provision				" 40,000 "
				
				
Ex 3				
(A)	Claim	Probability		
Scenario A	" 2,000,000 "	30%		
Scenario B	" 300,000 "	70%		
Total		" 300,000 "	as most likely outcome	
				
(B)	Claim	Probability		
Scenario A	" 100,000 "	25%		
Scenario B	" 300,000 "	50%		
Scenario C	" 500,000 "	25%		
Total		" 300,000 "	as weighted average	
		" 277,367 "		
				
(C)	Claim	Probability		
Scenario A	 -   	75%		
Scenario B	" 2,000,000 "	10%		
Scenario C	" 300,000 "	15%		
Total		 -   	it is contingent liability