Bridgeport Company owns a trade name that was purchased in an acquisition of McClellan Company. The trade name has a book value of $3,500,000, but according to GAAP, it is assessed for impairment on an annual basis. To perform this impairment test, Bridgeport must estimate the fair value of the trade name. It has developed the following cash flow estimates related to the trade name based on internal information. Each cash flow estimate reflects Bridgeports estimate of annual cash flows over the next 12 years. The trade name is assumed to have no salvage value after the 12 years. (Assume the cash flows occur at the end of each year.)

Cash Flow Estimate Probability Assessment

384,200 20%

643,200 50%

766,200 30%