Sunland Company must perform an impairment test on its equipment. The equipment will produce the following cash flows. Year 1, $25,000, Year 2, $50,000, Year 3, $57,500. The discount rate is 12%. What is the value in use for this equipment? Use the present value table in your calculation. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answer to 2 decimal places, eg. 5,275.25)

Sunland Company must perform an impairment test on its equipment. The equipment will produce the following cash flows. Year 1, $25,000, Year 2, $50,000, Year 3, $57,500. The discount rate is 12%. What is the value in use for this equipment? Use the present value table in your calculation. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answer to 2 decimal places, eg. 5,275.25)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 6CE

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