market risks. NewTech will estimate these discount rates using the assumed rates that a market participant would expect to pay to borrow money. NewTech has performed step 2 of its impairment test, as follows. Step 2 test: Measure impairment loss as the amount by which carrying value exceeds fair value. Carrying value: Expected present value technique (in millions): $10 million vs. Questions: 1. An impairment loss (should/ should not) be recognized. The amount of the loss is $ which represents the amount by which carrying value exceeds the asset's 2. Explain the significance of the second column in the "expected present value" table (possible cash flows from use of equipment). What does this mean? 3. Why are the cash flows in the step 1 test not discounted, but the cash flows in the step 2 test are? As necessary, look back at guidance on both steps of the test to respond. 4. What is the new carrying value for the equipment, on which depreciation will be calculated
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