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On January 2, 2004, the ABC Flour Company purchased a new machine at a cost of exist82,000. Installation costs for the machine were exist3,000. The

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On January 2, 2004, the ABC Flour Company purchased a new machine at a cost of exist82,000. Installation costs for the machine were exist3,000. The machine was expected to have a useful life of 10 years, with a salvage value of exist3,000. The company uses straight-line depreciation for financial reporting. On January 3, 2007, the machine broke down, and an extraordinary repair had to be made to the machine at a cost of exist8,000. The repair extended the machine's life to 13 years, but left the salvage value unchanged. On January 2, 2010, an improvement was made to the machine in the amount of exist5,000 that increased the machine's productivity and increased the salvage value (to exist6,000), but did not affect the remaining useful life. Calculate depreciation expenses every 31^st December for the years 2004, 2007 and 2010 and comment in detail. Discuss the impact of Inflation, Depreciation, Taxes/VAT on the profitability of engineering projects

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