7. (20 Points) At the end of 2020, Mitchell Company is conducting an impairment test and needs to develop a fair value estimate for machinery used in its manufacturing operations. Given the nature of Mitchell's production process, the equipment is for special use (no secondhand market values are available.) The equipment will be obsolete after 2 years and will be sold for scrap at the end of 2023. Mitchell's accountants have developed the following cash flow information for the equipment Year 2021 Cash Flow Estimate $8,000 Probability Assessment 50% 50% 9,000 2022 $(500) 2,000 4,000 20% 60% 20% Scrap value 2023 $500 50% 900 50% Required: Using expected cash flow and present value techniques, determine the value of the machinery at the end of 2020. Use a 5% discount rate. Assume all cash flows occur at the end of the year