B) A company owns a machine which was purchased last year for GhC280,000 Depreciation is provided at 25% straight line. It is estimated that this machine could be sold second hand for GhC88,000 although the conparty would have to spend about GhC500 in advertising costs to do so. If replaced the machine would cost GhC360,000, although this current model is 20% more efficient. The machine is expected to generate net cash inflows of GhC40,000 for the next 5 years after which time it will be scrapped. The comparty's cost ofborrowing is 6%. The discount factors at 6% at the end of Year 1 0.943 Year 2 0.890 Year 3 0.840 Year 4 0.792 Year 5 0.747 Requirement: Define the under listed basis of valuing assets as far as IAS 16 is concerned and determine the value of the Machine using each of the basis indicated below (show workings where necessary) [20 marks]. a) Historical Cost (3 Marks) b) Fair Value (3 Marks) c) Current Cost (3 Marks) d) Net Realisable Value (3 Marks) e) Economic Value (3 Marks) B) A company owns a machine which was purchased last year for GhC280,000 Depreciation is provided at 25% straight line. It is estimated that this machine could be sold second hand for GhC88,000 although the conparty would have to spend about GhC500 in advertising costs to do so. If replaced the machine would cost GhC360,000, although this current model is 20% more efficient. The machine is expected to generate net cash inflows of GhC40,000 for the next 5 years after which time it will be scrapped. The comparty's cost ofborrowing is 6%. The discount factors at 6% at the end of Year 1 0.943 Year 2 0.890 Year 3 0.840 Year 4 0.792 Year 5 0.747 Requirement: Define the under listed basis of valuing assets as far as IAS 16 is concerned and determine the value of the Machine using each of the basis indicated below (show workings where necessary) [20 marks]. a) Historical Cost (3 Marks) b) Fair Value (3 Marks) c) Current Cost (3 Marks) d) Net Realisable Value (3 Marks) e) Economic Value