A company purchased a machine for $ 80 million. The machine occupies a considerable area and therefore a sum of $ 3 million was invested in the preparation of a site known as the machine. The transportation, assembly and installation costs are $ 2 million. Shortly before operating the machine, the company held a big party for customers and employees at a cost of $ 3 million. The expected life of the machine in the company is 4 years. The expected net income from the machine is as follows: First year - $ 40 million Second year - $ 40 million Third year $ 20 million Fourth year - $ 10 million The value of the machine (at the end of 4 years) is NIS 15.5 million. Realizing the value of the garter in this amount involves a cost of $ 500,000.

Required: A. Reasonably determine the cost of the machine B. Explain the set of problems that the application of a straight line method creates in this case third. Calculate depreciation using the depreciation method (as taught in class) for this case and explain why the problems you mentioned in section B above do not exist under depreciation using the depreciation method D. Explain the position of the accounting standard regarding income-based depreciation and the reasoning for it God. Assume for the purposes of this section that at the end of the second year, after taking a straight line depreciation, the company has decided that the asset will operate for another 3 years (a total of 5 years) and that its gret value will be zero at the end of the 5 years. How will the company's decision affect the depreciation calculation. Is this change legitimate? If you were the auditors, what would you require of the company to justify the change?