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please help me thank you in advance At the end of 2020, Wildhorse Company is conducting an impairment test and needs to develop a fair
please help me thank you in advance
At the end of 2020, Wildhorse 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 Wildhorse's production process, the equipment is for special use. (No secondhand market values are available.) The equipment will be obsolete in 2 years, and Wildhorse's accountants have developed the following cash flow information for the equipment. Year Net Cash Flow Estimate Probability Assessment 2021 $6,070 40% 9,490 60% 2022 $(540) 20% 2,020 60% 4,220 20% Scrap value 2022 $540 50% 960 50% Click here to view factor tables Using expected cash flow and present value techniques, determine the fair value of the machinery at the end of 2020. Use a 5% 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 O decimal places, e.g. 458,581.) Fair value of the machinery at the end of 2020 $ 10379Step by Step Solution
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