Sunland Company must perform an impairment test on its equipment. The equipment will produce the following cash flows. Year 1, $25,000, Year 2, $50,000, Year 3, $57,500. The discount rate is 12%. What is the value in use for this equipment? Use the present value table in your calculation. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answer to 2 decimal places, eg. 5,275.25)
Sunland Company must perform an impairment test on its equipment. The equipment will produce the following cash flows. Year 1, $25,000, Year 2, $50,000, Year 3, $57,500. The discount rate is 12%. What is the value in use for this equipment? Use the present value table in your calculation. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answer to 2 decimal places, eg. 5,275.25)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: acounting
Transcribed Image Text:Sunland Company must perform an impairment test on its equipment. The equipment will produce the following cash flows Year 1,
$25,000, Year 2, $50,000, Year 3, $57,500. The discount rate is 12%. What is the value in use for this equipment? Use the present
value table in your calculation. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answer to
2 decimal places, eg. 5,275.25)
Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1
Value in use
109365
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