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DCF Ltd. purchased an asset on January 1, 1981. The asset will have cash flows of $40, $70, and $10 at the end of 1981,
DCF Ltd. purchased an asset on January 1, 1981. The asset will have cash flows of $40, $70, and $10 at the end of 1981, 1982, and 1983. The price DCF paid for the asset was equal to its present value. No other cash flows will be realized by the firm from this asset.Using the DCF accounting model, and assuming DCF typically realizes a 10% return on its assets, give the depreciation charge DCF will report in 1981.
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