Four years ago Omega Technology, Inc., acquired a machine to use in its computer chip...
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Accounting
Four years ago Omega Technology, Inc., acquired a machine to use in its computer chip manufacturing operations at a cost of $35,000,000. The firm expected the machine to have a seven-year useful life and a zero salvage value. The company has been using straight-line depreciation for the asset. Due to the rapid rate of technological change in the industry, at the end of Year 4, Omega estimates that the machine is capable of generating (undiscounted) future cash flows of $11,000,000. Based on the quoted market prices of similar assets, Omega estimates the machine to have a fair value of $9,500,000.
Required: At the end of Year 4, at what amount should the machine appear in Omegas balance sheet?
(the answer is NOT 20 million, 11 million, or 15 million) Thanks!
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