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snow_tiger [21]
4 years ago
5

ACME Drilling is evaluating an offshore oil-drilling platform for possible impairment. The company estimates the following: book

value, $18.6 million; fair value, $11.7 million; sum of estimated future cash flows generated from the oil-drilling platform, $16.4 million. What amount of impairment loss, if any, should ACME record? (Enter your answer in millions rounded to 1 decimal place.)
Business
1 answer:
alekssr [168]4 years ago
6 0

Answer:

ACME Drilling should record impairment loss of $6.9 million

Explanation:

According to GAAP, when the fair value of an asset is below the net carrying amount of that asset ( Asset's historical cost - Asset's accumulated depreciation or the net book value of the asset), the Company should record it as asset impairment loss.

In ACME's case, the net book value is $18.6 million while the estimated fair value is only $11.7 million meaning that the platform is actually worth less than it is recorded on ACME's book. Thus, an impairment loss of $6.9 million should be recorded ( $18.6 million - $11.7 million) to realize the fair value of the oil-drilling platform.

The sum of projected sum of future cash flows in this case is not suitable to be used to determine the oil-drilling platform because it has not been discounted to the present value amount, and also, it is not appropriate under GAAP.

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Answer:

a. Jack's BATNA is keeping his current job.

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The opposite of this is WATNA (worst alternative to a negotiated agreement).

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Policymakers who manage monetary and fiscal policy and desire to offset the impacts on output of an economic contraction forced by a shift in aggregate supply could use policy to shift Aggregate demand to the right.

<h3>What is Aggregate demand?</h3>

Aggregate demand or domestic final demand exists as the total demand for final goods and services in an economy at a provided time. It is often named effective demand, though at other moments this term stands distinguished. This exists the demand for the gross domestic product of a country. Aggregate demand exists as a phrase used in macroeconomics to represent the total demand for goods produced domestically, including consumer goods, services, and capital goods.

Aggregate demand exists as the total amount of goods and services in an economy that consumers stand willing to expend within a certain period. Aggregate demand is estimated as the sum of consumer spending, investment spending, government spending, and the distinction between exports and imports. Aggregate supply exists as the total quantity of output firms will produce and sell—in other terms, the real GDP. The upward-sloping total supply curve—also understood as the short-run aggregate supply curve—demonstrates the positive connection between the price level and real GDP in the short run.

Hence, Policymakers who manage monetary and fiscal policy and desire to offset the impacts on output of an economic contraction forced by a shift in aggregate supply could use policy to shift Aggregate demand to the right.

To learn more about Aggregate demand refer to:

brainly.com/question/1490249

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