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Equipment with a cost of R500 000 is purchased and R200 000 is paid immediately on 1 January 2016. The balance will only be paid
Equipment with a cost of R500 000 is purchased and R200 000 is paid immediately on 1 January 2016. The balance will only be paid on 31 December 2016, which exceeds normal credit terms. An after-tax discount rate is 9% per annum. Assume a tax rate of 28%. Calculate the cost of the asset at initial recognition.
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