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What is the net book value of component a after five years

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Reference no: EM132499564

Nigeria Ltd. acquires a new machine. It is comprised of two different components (A and B) that are expected to be overhauled at different times.

The acquisition costs of the components are as follows:

Component A:$198,000

Component B:$240,000

Question 1: Component A is expected to have a useful life of 5 years and a residual value of $20,000 before the first major overhaul is required. Component B is expected to have a useful life of 7 years and a residual value of $15,000 before its first overhaul. Nigeria uses straight-line depreciation for all its equipment. What is the net book value of component A after 5 years?

Reference no: EM132499564

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