Johnson Limited Estimated the Net Present Value of Future Cash

question 9

Multiple Choice

Johnson Limited estimated the net present value of future cash flows from specialised Plant acquired under a business combination to be $30 000. A replacement cost for the Plant is estimated to be $33 000. The Plant has been independently appraised at a value of $31 000. A similar item of Plant cost the acquirer $29 000 the previous year. What is the fair value for recognition of the Plant under a business combination?

• A) $29 000
• B) $30 000
• C) $33 000
• D) $31 000.

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Definitions:

Osteoporosis

Osteoporosis is a condition characterized by weakened bones, increasing the risk of fractures, often due to age-related or hormonal factors.

Calcitonin

A thyroid gland secretion crucial for the regulation of calcium quantities in the blood.

Epiphyseal Plate

A growth plate located at the ends of long bones where new bone tissue is generated during growth.

Zone of Proliferation

Refers to a region in a growth plate of bones where cartilage cells are rapidly dividing and contributing to bone lengthening.