Medic Berhad owns a licence that was purchased in an acquisition of Herbal Son Bhd. The licence has a book value of RM3,700,000, and according to MFRS 138, it is assessed for impairment on an annual basis. To perform this impairment test, Medic Berhad must estimate the fair value of the licence. Medic Berhad developed the following estimates of annual cash flows based on internal information. Each cash flow estimate reflect Medic Berhad's estimate of annual cash flows over the next 8 years. The license is assumed to have no residual value after the 8 years. Assume the cash flows occur at the end of each year. Cash flow estimates Probability assessment 450,000 20% 650,000 50% 850,000 30% The present value table for single sum and ordinary annuity of 8% and 10% is given as follows: Period Single sum factor Ordinary Annuity factor 8% 10% 3% 10% 0.926 0.909 0.926 0.909 0.857 0.826 1.783 1.736 AWNH 0.794 0.751 2.577 2.487 0.735 0.683 3.312 3.170 0.681 0.621 3.993 3.791 0.630 0.564 4.623 4.355 0.583 0.513 5.206 4.868 8 0.540 0.467 5.747 5.335 REQUIRED: (a) Assume that the appropriate discount rate is 8%, calculate the estimated fair value of the license. (b) Calculate the estimated impairment on the license based on your calculation in part (a). (c) Is the estimate develop for part (a) a Level 1, Level 2 or Level 3 fair value estimate? Explain