Oliveira Limited Estimated That the Net Present Value of Future

question 6

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 last 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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