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Hannah Company purchased an intangible asset for $450,000 on January 1 of Year 1. The...

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Accounting

Hannah Company purchased an intangible asset for $450,000 on January 1 of Year 1. The asset is assumed to have a 15-year useful life with zero salvage value. Amortization expense is computed using the straight-line method. On January 1 of Year 2, the asset was evaluated to determine whether it was impaired. As of January 1 of Year 2, the intangible asset was expected to generate future cash flows of $25,000 per year (at the end of the year) for the remaining 14 years of its life. The appropriate discount rate is 13% compounded annually. What impairment loss should be recognized in Year 2? $70,000 4 $185,942 $262,438 O $100,000

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