ABC Ltd leases a manufacturing building. In terms of the leaseagreement any machinery installed in the building must bedismantled at the end of the lease term, which is at the end ofyear At the beginning of year a machine was acquiredat a price of $ and installed. It is normal practice thatsettlement of the purchase price should occur immediately,but the supplier agreed to postpone settlement till the end ofyear It is estimated that it will cost $ to dismantlethe machine at the end of year A fair discount factor is per annum before tax, compounded annuallyRequired: Calculate the cost of the machine.

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Machine was acquired at the beginning of year 2 for 80000 Settlement was pos... View the full answer