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Hiteck Electronics sells a diagnostic machine to a hospital with a four-year payment plan. The company would like to estimate the bad debt allowance needed to cover the notes outstanding over the next four years. Estimated lost cash flows and the probability of occurrence for each of the next four years are summarized in the following schedule. 5 6 7 Year 2023 8 9 10 2024 Projected Cash Flow Loss from Uncollected Notes $8,000 18,000 $10,000 22,000 45,000 $6,000 14,000 $26,000 35,000 8% Probability of Loss Occurring 90% 10% 15% 70% 15% 85% 15% 5036 5096 12 2025 14 2026 15 16 Risk free rate 13. Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the instruction tab you will be marked 15 wrong 20 21 Requirement 22 What is the estimated bad debt allowance at December 31, 2022? 4 1 What is the estimated bad debt allowance at December 31, 2022? (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the 2 Instruction tab you will be marked wrong.) 3 Future value Year (FV) 5 2023 6 2024 7 2025 8 2026 9 10 Total Present Value (PV) on 11 12 13