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Points: 0 of 6 Cupcakes-R-Us, Inc. is reviewing all available information regarding the future use of its baking equipment, which it intends to use for the foreseeable future (Click the icon to view additional information) Future Value of $1 table Future Value of an Ordinary More info Present Value of $1 table Present Value of an Ordina Read the requirements The company has observed a decline in the demand for its products. The information also indicates that this equipment may be obsolete and could be Requirement a. Compute the carrying value of Cupca impaired. Cupcakes -R- Us acquired the equipment 2 years ago at a cost of $500,000 and deprecated it using the straight-line method with an estimated The carrying value of the baking equipment at the end residual value of $10,000 and a 7.year useful life. At the end of the second year, management estimates the following cash flows from the use of the asset Cash-Flow Projection Cash-Flow Projection Estimate 1 -Estimate 2 Future Period Year 1 $ 120,000 s 120.000 You 2 100,000 100.000 Year 3 70,000 80,000 35,000 35,000 Year 5 30,000 30.000 Yoar 4 Help me solve this Calculator AS Print Clear au Done Type here to search Requirements a. Compute the carrying value of Cupcakes -R- Us's equipment. b. Compute the present value of expected cash flows under Estimate 1 and Estimate 2. Assume that the cost of capital is 8%. For each estimate, is the present value of estimated future cash flows higher or lower than the equipment's carrying value? c. Conduct the impairment tests for Cupcakes -R- Us under Estimate 1 and Estimate 2. If required, prepare the journal entry to record any impairment loss. Print Done