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Yuan Inc. has a large piece of machinery, and management has determined there is potential...

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Accounting

Yuan Inc. has a large piece of machinery, and management has determined there is potential impairment. This piece of machinery has independent cash inflows. The following information relates to the machine:
Net book value is $30 million.
The machine could be sold for $16 million less a 10% commission.
If the company was forced to sell immediately, the proceeds would likely be $13 million.
If the machine continues to be used in production, it is anticipated to generate $7 million of cash flows for the next five years. It would require annual maintenance costs of $300,000 a year. The equipment could be sold for $100,000 at the end of the five years.
Assume Yuan has a discount rate of 5%.
(PV of $1, PVA of $1, and PVAD of $1.)(Use appropriate factor(s) from the tables provided. Round time value factor to 5 decimal places.)
Required:
Discuss whether the machine is impaired?
Yes
No
If it is, what is the amount of the impairment loss? (Enter answer in whole dollars, not in million.)
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