The following data apply to a non-current asset: £ Net realisable value 5,000 Historic cost 6,000 Net present value in use 7,500 Replacement cost 10,000 What is the deprival value? A) £5,000 B) £6,000 C) £7,500 D) £10,000

The following data apply to a non-current asset: £ Net realisable value 5,000 Historic cost 6,000 Net present value in use 7,500 Replacement cost 10,000 What is the deprival value? A) £5,000 B) £6,000 C) £7,500 D) £10,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...

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Question

7) The following data apply to a non-current asset: £

Net realisable value 5,000

Historic cost 6,000

Net present value in use 7,500

Replacement cost 10,000

What is the deprival value?

A) £5,000

B) £6,000

C) £7,500

D) £10,000

Definition Definition Calculation used to evaluate the investment and financing decisions that involve cash flows occurring over multiple periods. NPV is calculated as the difference between the present value of cash inflow and cash outflow. NPV is used for capital budgeting and investment planning as well as to compare similar investment alternatives.

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