Oliveira Limited Estimated That the Net Present Value of Future

question 18

Multiple Choice

Oliveira Limited estimated that the net present value of future cash flows from Equipment acquired in a business combination is $15 000. The cost of replacing the Equipment is estimated to be $18 000. The Equipment has been independently appraised at a value of $14 000. A similar item of Equipment cost the acquirer $19 000 the previous year. The fair value at which the Equipment will be recognised when recording the business combination is:

• A) $14 000
• B) $15 000
• C) $18 000
• D) $19 000.

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Definitions:

Majority Influence

The impact that the larger portion of a group can have on individual behavior or beliefs, often leading to conformity.

Minority Influence

The process by which a smaller group or individual can change the beliefs or behaviors of the majority through consistent, committed actions.

Permanent Change

An alteration or modification in processes, behavior, or systems that is intended to last indefinitely, without reversal to original state.

Conversion Theory

A theory suggesting that minority views can influence and ultimately change the majority opinion under certain conditions.