MACHINE A MACHINE B INITIAL COST R100 000 R110 000 EXPECTED ECONOMIC LIFE 5 YEARS 5 YEARS EXPECTED DISPOSAL/RESIDUAL VALUE R10 000 EXPECTED NET CASH INFLOWS R R END OF: YEAR 1 34 000 33 000 YEAR 2 27 000 33 000 YEAR 3 32 000 33 000 YEAR 4 30 000 33 000 YEAR 5 26 000 33 000 DEPRECIATION PER YEAR 18 000 22 000 COMPANY ESTIMATES COST CAPITAL = 14%
MACHINE A MACHINE B INITIAL COST R100 000 R110 000 EXPECTED ECONOMIC LIFE 5 YEARS 5 YEARS EXPECTED DISPOSAL/RESIDUAL VALUE R10 000 EXPECTED NET CASH INFLOWS R R END OF: YEAR 1 34 000 33 000 YEAR 2 27 000 33 000 YEAR 3 32 000 33 000 YEAR 4 30 000 33 000 YEAR 5 26 000 33 000 DEPRECIATION PER YEAR 18 000 22 000 COMPANY ESTIMATES COST CAPITAL = 14%
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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Question
MACHINE A | MACHINE B | |
INITIAL COST | R100 000 | R110 000 |
EXPECTED ECONOMIC LIFE | 5 YEARS | 5 YEARS |
EXPECTED DISPOSAL/RESIDUAL VALUE | R10 000 | |
EXPECTED NET |
R | R |
END OF: YEAR 1 | 34 000 | 33 000 |
YEAR 2 | 27 000 | 33 000 |
YEAR 3 | 32 000 | 33 000 |
YEAR 4 | 30 000 | 33 000 |
YEAR 5 | 26 000 | 33 000 |
18 000 | 22 000 | |
COMPANY ESTIMATES COST CAPITAL = 14% |
3)Calculate the
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