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Iron Chemicals acquires a machine that should go through a major overhaul every three years. The total price for the equipment is 1 million.

Iron Chemicals acquires a machine that should go through a major overhaul every three years. The total price for the equipment is 1 million. It is estimated that each overhaul will cost 200,000. The machine has an estimated useful life of 10 years. What is the correct treatment of the 200,000 expenditure in year 3?

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