Final answer:
Estimating uncertain consideration can be done by determining the most likely amount to be received or calculating the expected value of the amounts received, or a choice between the two based upon the scenario.
Step-by-step explanation:
The acceptable ways to estimate uncertain consideration include using the most likely amount to be received, the expected value of the amount to be received, or choosing between these two methods depending on the circumstances. The most likely amount is determined by considering the single most probable outcome, while the expected value is calculated by considering all possible outcomes and their probabilities. In making such estimates, it's crucial not just to pick numbers randomly but to base them on sound physical reasoning and relevant past experience. These methods act as rough guides to discern significant deals from trivial ones and to help develop physical intuition.
For example, let's say a company is considering an investment that could yield returns of $200,000, $600,000, or $400,000. If each outcome is equally likely, the company might calculate the expected value by summing up the potential returns, multiplied by their probabilities, to get an average expected return. On the other hand, if one outcome is significantly more probable than the others, the company may instead choose to consider the most likely amount as the basis for estimation.