Garfield plc is considering whether to enter into a new project. The machinery which would be used
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Garfield plc is considering whether to enter into a new project. The machinery which would be used to produce the goods for the contract was purchased seven years ago at a cost of $80,000, with an estimated life of ten years. Depreciation is on a straight line basis. The machinery has been idle for some time, and if not used on this contract would be scrapped and sold immediately for an estimated $5,000. After use on this contract the machinery would have no value, and would have to be dismantled and disposed of at a cost of $1,500.
Ignoring the time value of money, what is the relevant cost of the machine to the new contract?
Related Book For
Introduction To Federal Income Taxation In Canada
ISBN: 9781554965021
33rd Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett
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