Sandhill Industries has several assets as part of a cash, generating unit that have limited use due to changing market trends and declining demand for the product produced by these assets. Management estimates that the carrying value of these assets is $86600 and the assets have no other use. The company intends on producing this product for three more years prior to disposing of the assets. The net future cash flows related to the product production and sale of the equipment is $87600, while the present value of the cash flows is $81950. The fair value less the cost of disposal of the assets is estimated at $71300. What is the value of the impairment loss under the rational entity model? $0, there is no impairment loss $4650 $15300 O $5450

Sandhill Industries has several assets as part of a cash, generating unit that have limited use due to changing market trends and declining demand for the product produced by these assets. Management estimates that the carrying value of these assets is $86600 and the assets have no other use. The company intends on producing this product for three more years prior to disposing of the assets. The net future cash flows related to the product production and sale of the equipment is $87600, while the present value of the cash flows is $81950. The fair value less the cost of disposal of the assets is estimated at $71300. What is the value of the impairment loss under the rational entity model? $0, there is no impairment loss $4650 $15300 O $5450

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 16PC

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