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How much is the recoverable amount for kay corporation

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Reference no: EM132893538

Problem 1: An equipment of KAY Corporation was tested for impairment on December 31, 2019. The carrying value of the said equipment on that date is ?4,800,000. The equipment can be sold for ?4,500,000, and an estimate of ?200,000 will be incurred for disposal. The cash flows that will be generated by the equipment for 2020, 2021, and 2022, are ?2,000,000; ?1,800,000; and ?1,450,000, respectively. The appropriate discount rate is 11%. How much is the recoverable amount?

a) ? 4,500,000
b) ? 4,800,00
c) ? 4,300,000
d) ? 4,322,920

Reference no: EM132893538

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