Twelve years ago, an industrial facility bought a boring machine for P65,000. The estimated life of this machine is 25 years and a depreciation reserve had been placed based on this. The price of the latest model is P125,000 and the facility owner wants to replace the machine with this latest model. The old unit can be sold for P18,000. How much new capital will be required for the purchase?

Twelve years ago, an industrial facility bought a boring machine for P65,000. The estimated life of this machine is 25 years and a depreciation reserve had been placed based on this. The price of the latest model is P125,000 and the facility owner wants to replace the machine with this latest model. The old unit can be sold for P18,000. How much new capital will be required for the purchase?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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