8. A machine required for this project was acquired 5 years ago for an earlier project,...
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8. A machine required for this project was acquired 5 years ago for an earlier project, at a cost of $25,000. It is being depreciated on a straight-line basis over ten years. There is no expected selling price at the end of its useful economic life. The machine has been locked in a warehouse for several months since it has had no alternative use. However, the company has just been offered an alternative contract, Project Z, using this machine which will generate a contribution of $4,500. The net realisable value of the machine is $5,600. The cost of keeping this machine in perfect working order is $900, payable immediately but if it is used in the project 8, the maintenance cost will be $1,300. What is the relevant cost of the project 8? 8. A machine required for this project was acquired 5 years ago for an earlier project, at a cost of $25,000. It is being depreciated on a straight-line basis over ten years. There is no expected selling price at the end of its useful economic life. The machine has been locked in a warehouse for several months since it has had no alternative use. However, the company has just been offered an alternative contract, Project Z, using this machine which will generate a contribution of $4,500. The net realisable value of the machine is $5,600. The cost of keeping this machine in perfect working order is $900, payable immediately but if it is used in the project 8, the maintenance cost will be $1,300. What is the relevant cost of the project 8?
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Related Book For
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
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