Question
General Optic Corporation operates a manufacturing plant in Arizona. Due to a significant decline in demand for the product manufactured at the Arizona site, an
General Optic Corporation operates a manufacturing plant in Arizona. Due to a significant decline in demand for the product manufactured at the Arizona site, an impairment test is deemed appropriate. Management has acquired the following information for the assets at the plant:
Cost | $ | 34,500,000 | |
Accumulated depreciation | 14,400,000 | ||
Generals estimate of the total cash flows to be generated by selling the products manufactured at its Arizona plant, not discounted to present value | 15,400,000 | ||
The fair value of the Arizona plant is estimated to be $12,000,000. 1)
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