Recognizing Changes in Value Two years ago, Atlas Card Company purchased a large, four-color printing press for $500,000 with the intent of using it for 7 years. Recently, the production manager just learned that replacing the press with a comparable new one would cost $800,000. On the other hand, if the company were to attempt selling the current machine, the production manager estimates it would receive $100,000. The manager also estimates the company can make $1,300,000 from selling materials produced on the press over the next 5 years.

a. What should be the value assigned to the press in Atlas Card’s financial statements?

b. Under what conditions should the press be valued at

$1,300,000?

c. Under what conditions should the press be valued at

$800,000?

d. Under what conditions should the press be valued at

$100,000?