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At what amount should the patent be carried

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Question - Crane Company acquired a patent on an oil extraction technique on January 1, 2020 for $7450000. It was expected to have a 10 year life and no residual value. Crane uses straight-line amortization for patents. On December 31, 2021, the future cash flows expected from the patent were $885000 per year for the next eight years. The present value of these cash flows, discounted at Crane's market interest rate, is $4175000. At what amount should the patent be carried on the December 31, 2021 balance sheet?

Reference no: EM132936117

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