Question: 9 P6-14 (Expected Cash Flows and Present Value) At the end of 2014, Sawyer Company is conducting an impairment test and needs to develop a

9 P6-14 (Expected Cash Flows and Present Value) At the end of 2014, Sawyer Company is conducting an impairment test and needs to develop a fair value estimate for machinery used in its manufacturing opera- tions. Given the nature of Sawyer's production process, the equipment is for special use. (No secondhand market values are available.) The equipment will be obsolete in 2 years, and Sawyer's accountants have developed the following cash flow information for the equipment. Net Cash Flow Estimate $6,000 9,000 $(500) 2,000 4,000 Probability Assessment 40% 60% Year 2015 2016 is 20% 60% 20% Scrap value S 500 2016 50% instructionsEE6-7 E6-12P6-7P6-14 Rubric (4)

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