Pearl Company owns a trade name that was purchased in an acquisition of McClellan CompanyThe trade name has a book value of $3,500,000 , but according to GAAP assessed for Impalement on an annual basisperform this impairment testPearl must estimate the fair value of the trade . It has developed the following cash flow estimates related to the trade name based on Internal informationEach cash estimate reflects Pearls estimate of annual cash flows over next 10 years. The trade is assumed to have no salvage value after the 10 years (the cash flows occur at the end of each year) Cash Flow Estimate $374,100 631,400 759,600 Probability 20% 50 % 30 (a) What is the estimated fair value of the trade name? Pearl determines that the appropriate discount rate for this estimation 10.

Pearl 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, Pearl 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 Pearl's estimate of annual cash flows over the next 10 years. The trade name assumed to have no salvage value after the 10 years. (Assume the cash flows occur at the end of each year.) Cash Flow Estimate $374,100 631,400 759,600 Probability Assessment 20% 50% 30% Click here to view factor tables (a) What is the estimated fair value of the trade name? Pearl determines that the appropriate discount rate for this estimation is 10%. (Round factor values to 5 decimal places, eg. 1.25124 and final answer to decimal places, e.g. 458,581.) Estimated fair value $