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help! everything you need to answer questiond 5-8. Help! that is the full question Exercises 1-8 Company ABZ invested $200,000 cash in new equipment at
help! everything you need to answer questiond 5-8. Help!
that is the full question
Exercises 1-8 Company ABZ invested $200,000 cash in new equipment at the beginning of 2005. The equipment was depreciated evenly over 10 years with an expected salvage value of $10,000. 5. How is the company's financial position different if the equipment is purchased with debt instead of cash? 6. Now assume that ABZ is a subsidiary of ZBA, which is based in Brazil. If Brazil has inflation of 15 percent in 2005 and 25 percent in 2006-2008, how much would the book value of the equipment be in reals? What if Brazil had inflation of 35 percent in 20062008? 7. If the company sells the equipment at the beginning of 2009 for $325,000, how much gain or loss is recognized under each of the three accounting treatments? 8. IF ABZ does sell the equipment for $325,000, what are the potential benefits and dangers in the current high-inflation economy? inflation hit the economy hard, raising the CPI from 200 to 245. It is estimated that would cost $400,000 to replace the machine Step by Step Solution
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