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The following information relates to the 31 December replacement of a machine:
Tax written down value of old machine
$
20,000
Cost of new machine
180,000
Sale proceeds of old machine
30,000
Tax rate (tax is paid without delay)
30%
What is the net relevant cost of replacing the machine on 31 December?
*What was the net relevant cost 150000..??*
Is this an OT question
Where is it from?
Have you done it ? Did you get it wrong?Is this you telling me what you think the answer at the end?
It was Mentioned FM Mock exam 1 , year 2022 in pdf..?? And no answer part for the question
I think scrap value will be taxed not too sure on tax written down value of old machine whether to include or not
30000*30% = 9000
30000-9000= 21000
180-21 = 159
I am not sure on tax written down value of old machine
There are about 3 ways of calculating this depending on your interpretation:
You are going to ask me which way is correct.
I am going to say that I do not know with absolute certainty. So I think that is why the question has been removed!
It was a fill in the gap question so it needs to be clear or within a range.
I would advise you to move on from this question
Thanks ? Ya the three ways would be useful? for calculation if mcq is there maybe helpful if they ask…..
And i had a doubt in traditional view theory
Is there linear relationship between cost of equity and gearing ..???
Is the statement true or false
In study hub they gave true …
But in old question
Which of the statement concerning capital structure is true..?
The answer is business risk assumed to be constant
But also that linear relation ship is in answer..?
I know both are different question
But my doubt if that is true in one situtation as per theory it must be true for the second right..?
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