As part of a business combination, Mother Ryan Company acquired a customer list and a franchise agreement. Mother Ryan uses the expected cash flow approach for estimating the fair value of these two intangibles. The appropriate interest rate is 8%. The potential future cash flows from the two intangibles, and their associated probabilities, are as follows:

Customer List

Outcome 1 20% probability of cash flows of $40,000 at the end of each year for five years

Outcome 2 30% probability of cash flows of $18,000 at the end of each year for four years

Outcome 3 50% probability of cash flows of $9,000 at the end of each year for three years

Franchise Agreement

Outcome 1 10% probability of cash flows of $450,000 at the end of each year for 10 years

Outcome 2 20% probability of cash flows of $12,000 at the end of each year for four years

Outcome 3 70% probability of cash flows of $500 at the end of each year for three years

Using the expected cash flow approach, estimate the fair value of the customer list and of the franchise agreement.