Byron Limited Estimated the Net Present Value of Future Cash

question 16

Multiple Choice

Byron Limited estimated the net present value of future cash flows from specialised equipment acquired under a business combination to be $120 000. A replacement cost for the equipment is estimated to be $132 000. The equipment has been independently appraised at a value of $122 000. A similar item of equipment cost the acquirer $118 000 last year. What is the value for recognition of the equipment under a business combination?

• A) $118 000.
• B) $122 000.
• C) $120 000.
• D) $132 000.

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