The following are futuro cash flows projected for an item of machinery (1) $200,000 to be incurred in three years tim e which will extend the life of the machine by a further five years (2)$55.000 annual revenue from products produced by the machine (2) $6,000 of finance costs on a bank loan taken out to purchase the machine (4) $60,000 maintenance costs to be incurred in 12 months time Which of the above cash flows are relevant to the calculation of the machines value in use

The following are futuro cash flows projected for an item of machinery (1) $200,000 to be incurred in three years tim e which will extend the life of the machine by a further five years (2)$55.000 annual revenue from products produced by the machine (2) $6,000 of finance costs on a bank loan taken out to purchase the machine (4) $60,000 maintenance costs to be incurred in 12 months time Which of the above cash flows are relevant to the calculation of the machines value in use

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 18EB: Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the...

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