Raintree Limited supplied you with the following information relevant to its impairment review: Certain items of machinery appeared to have suffered a pennanent diminution in value. The inventory produced by the machines was being sold below its cost and this occurrence had affected the value of the productive machinery. The historical cost of these machines was $650,000 with an accumulated depreciation of $200,000. The fair value less costs of disposal (FVLCOD), i.e., net selling price, is estimated at $270,000. The anticipated net cash inflows from the machines for the next three years are as follows: Year 2 3 Cash flow 8200.000 100,000 so,ooo Although the machines could be used after 3 years, their productive capacity beyond this period is uncertain. However, they could be sold at that time to net Raintree $40,000. A market discount rate of 10% per annum is to be used in any present value computations. Required Determine whether the machines are impaired. If they are, by how much?