Carvelle must estimate the net disposal cash flow of a milling machine that it will sell at the end of its useful life. Today, similar milling machines that have reached the end of their life under comparable conditions of use trade at 50,000 between knowledgeable, willing parties. The general and specific price change expected until the disposal date is estimated at 8 % in total (given). Costs of disposal at that date are estimated at 2,500. An identical new milling machine currently costs 180,000. What net disposal cash flow should Carvelle use?
- Current price of a similar machine at the end of its life
- 50,000
- Expected cumulative price change (given)
- 8 %
- Estimated costs of disposal
- 2,500
- Current price of a new machine
- 180,000