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Problem 6-14 At the end of 2020, Blue Company is conducting an impairment test and...

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Problem 6-14 At the end of 2020, Blue 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 Blue's production process, the equipment is for special use. (No secondhand market values are available.) The equipment will be obsolete in 2 years, and Blue's accountants have developed the following cash flow information for the equipment. Probability Assessment Year Net Cash Flow Estimate $5,980 9,640 2021 40% 60% 2022 20% 60% 20% $(480) 1,820 4,150 Scrap value $540 970 2022 50% 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 0 decimal places, e.g. 458,581.) Fair value of the machinery at the end of 2020 $

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