Gisele is performing a make/buy study involving the retention or disposal of a 4-year-old machine that was to be in production for 8 years. It cost $500,000 originally. Without a market value estimate, she decided to use the current book value plus 20% for the market value. If DDB depreciation is applied, the market value estimate is closest to: (a) $158,200 (b) $253,125 (c) $217,900 (d) $189,840
Gisele is performing a make/buy study involving the retention or disposal of a 4-year-old machine that was to be in production for 8 years. It cost $500,000 originally. Without a market value estimate, she decided to use the current book value plus 20% for the market value. If DDB depreciation is applied, the market value estimate is closest to: (a) $158,200 (b) $253,125 (c) $217,900 (d) $189,840
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Gisele is performing a make/buy study involving
the retention or disposal of a 4-year-old machine
that was to be in production for 8 years. It cost
$500,000 originally. Without a market value estimate,
she decided to use the current book value
plus 20% for the market value. If DDB
is applied, the market value estimate is
closest to:
(a) $158,200 (b) $253,125
(c) $217,900 (d) $189,840
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