31. A machine costs P50,000 5 years ago and the salvage value is estimated at P5,000 7 years from now. If it is to bereplaced by a new one and its trade-in value is P37,000, find the sunk cost using the Sum of Years Digit Method.

Sunk costs are irrelevant, as they do not affect the future cash flows. Future costs, which cannot…

Answered: find the sunk cost using the Sum of…

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Accounting

find the sunk cost using the Sum of Years Digit Method.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

22nd Edition

ISBN:9781305666160

Author:James A. Heintz, Robert W. Parry

Publisher:James A. Heintz, Robert W. Parry

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 3CE

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31. A machine costs P50,000 5 years ago and the salvage value is estimated at P5,000 7 years from now. If it is to be
replaced by a new one and its trade-in value is P37,000, find the sunk cost using the Sum of Years Digit Method.

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