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25 June, 04:25

The Tattle Teller has a printing press sitting idly in its back room. The press has no market value to another printer because the machine utilizes old technology. The firm could get $480 for the press as scrap metal. The press is six years old and originally cost $174,000. The current book value is $3,570. The president of the firm is considering a new project and feels he can use this press for that project. What value, if any, should be assigned to the press as an initial cost of the new project?

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  1. 25 June, 04:47
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    Answer: $480

    Explanation:

    Given that,

    Scrap value of metal = $480

    press is six years old, Original cost = $174,000

    Current book value = $3,570

    Since, we know that the realizable value of the printing press is only $ 480, so tattle teller should assign the same as the initial cost of the new project.

    Hence, $480 will be the initial cost of press for the new project.
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