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24. Autobots Bottling purchased for P800,000 a trademark for a very successful soft drink it markets under the name OK!, The trademark was determined to
24. Autobots Bottling purchased for P800,000 a trademark for a very successful soft drink it markets under the name OK!, The trademark was determined to have an indenite life. A competitor recently introduced a product that is in direct competition with the OK!, thus suggesting the need for an impairment test. Data gathered by Autobots suggests that the useful life of trademark is still indefinite, but the cash ows expected to be generated by the trademark have been reduced either to P30,000 per year (with a probability of 80%) or to P60,000 per year (with 20% probability). The appropriate riskfree interest rate is 10%. The appropriate riskadjusted interest rate is 5%. The loss on impairment of trademark is a. P440.000 b. P320.000 c. P200.000 d. P80.000
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