At the end of 2020, Cheyenne 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 Cheyennes production process, the equipment is for special use. (No secondhand market values are available.) The equipment will be obsolete in 2 years, and Cheyennes accountants have developed the following cash flow information for the equipment.

Year Net Cash Flow Estimate Probability Assessment 2021 $5,960 40% 8,740 60% 2022 $(460 ) 20% 2,110 60% 3,920 20% Scrap value 2022 $490 50% 880 50%

Using expected cash flow and present value techniques, determine the fair value of the machinery at the end of 2020. Use a 6% discount rate. Assume all cash flows occur at the end of the year. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Fair value of the machinery at the end of 2020