Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I keep getting the incorrect answer. I keep getting the incorrect answer. I entered $7897653 and that is also incorrect. Wildhorse Enterprises, Inc. operates several
I keep getting the incorrect answer.
I keep getting the incorrect answer. I entered $7897653 and that is also incorrect.
Wildhorse Enterprises, Inc. operates several stores throughout the western United States. As part of an operational and financial reporting review in a response to a downturn in its markets, the company's management has decided to perform an impairment test on five stores (combined). The five stores' sales have declined due to aging facilities and competition from a rival that opened new stores in the same markets. Management has developed the following information concerning the five stores as of the end of fiscal 2019. Original cost $39,340,000 Accumulated depreciation $9,890,000 Estimated remaining useful life 4 years Estimated expected future annual cash flows (not discounted) $3,600,000 per year Appropriate discount rate 6 percent X Your answer is incorrect. Determine the amount of impairment loss, assume that (1) the estimated remaining useful life is 10 years, (2) the estimated annual cash flows are $3.068,570 per year, and (3) the appropriate discount rate is 7 percent. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to decimal places eg. 5,125. If no loss, enter amount as 0.) Amount of impairment loss $ 7897592Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started