Wildhorse Concrete Ltd.owns a piece of cement manufacturing equipment and needs to determine the asset's value in
Question:
Wildhorse Concrete Ltd.owns a piece of cement manufacturing equipment and needs to determine the asset's value in use to test for impairment. Wildhorse's management estimates that the equipment will last for another four years and that it will generate the following future cash flows at the end of each year:
Year 1 | Year 2 | Year 3 | Year 4 | |||
$20,000 | $17,000 | $23,000 | $16,000 |
Calculate the value in use and compare it to the carrying value of the equipment using a discount rate of 6%.(For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 2 decimal places, e.g. 5,275.25.)
Value in us | $ |
Calculate the present value of each of these future cash flows using a discount rate of 6%. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answers to 2 decimal places, e.g. 5,275.25.)
Present Value | ||
Year 1 | $enter a dollar amount rounded to 2 decimal places | |
Year 2 | $enter a dollar amount rounded to 2 decimal places | |
Year 3 | $enter a dollar amount rounded to 2 decimal places | |
Year 4 | $enter a dollar amount rounded to 2 decimal places |
International Financial Reporting A Practical Guide
ISBN: 978-1292200743
6th edition
Authors: Alan Melville