Oliveira Limited Estimated That the Net Present Value of Future

question 16

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 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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