what is the estimated bad debt allowance?

AutoSave Fue Home Irun Page A A Canaleta NE M Accounting and the Time Value of Money 2 Expected Cash Flows 3 Hitech 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. 4 Year 2023 Probability of Loss Occurring 90% debt ex 10% allowanc 15% 7200 2024 70% 50 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% 15% 85% 12 2025 13 15% 50% 50% 2026 15 16 Risk-free rate 17 18 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 19 wrong 20 21 Requirement 22 What is the estimated bad debt allowance at December 31, 2022? INSTRUCTIONS ENTERANSWERS Alignment Font Clipboard What is the estimated bad debt allowance at December 31, 2022? A1 E D B 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 Instruction 2 tab you will be marked wrong.) 3 Future value Year (FV) 2023 2024 2025 2026 4 is 6 7 8 9 10 Total Present Value (PV) 11 12 13 74 75 16 17