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BCT Ltd has been offered the sum of 2 5 million for one of its manufacturing equipment. The equipment was bought at the beginning of
BCT Ltd has been offered the sum of million for one of its manufacturing equipment. The equipment was bought at the beginning of the accounting period on Jan X and was estimated to have a salvage value of zero at the end of its year useful life. The annual depreciation charge on the equipment was million. The sale is expected to take place on July X if BCT Ltd accepts the offer.
Advise BCT on whether to accept the offer. You should use appropriate calculations to support your answer. You should also identify any other financial and nonfinancial considerations that BCT must make in arriving at its decision.
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