Determine whether the one year principle would apply

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Reference no: EM131356351

For each of the following cases, determine whether the one year principle would apply.

(a) A defender has been in use for seven years and has negligible salvage value. Operating costs are €40 0 per year for electricity. Once every five years it is overhauled at a cost of €1000.

(b) A defender has been in use for seven years and has negligible salvage value. Operating costs are €40 0 per year for electricity. Once a year it is overhauled at a cost of €1000.

(c) A defender has been in use for two years and has negligible salvage value. Operating costs are €40 0 per year for electricity. Once a year it is overhauled at a cost of €1000.

(d) A defender has been in use for seven years and has current salvage value of €4000. Its value one year from now is estimated to be €4000. Operating costs are €40 0 per year for electricity. Once a year it is overhauled at a cost of €1000.

(e) A defender has been in use for seven years and has current salvage value of €4000. Its value one year from now is estimated to be €2000. Operating costs are €40 0 per year for electricity. Once a year it is overhauled at a cost of €1000.

Reference no: EM131356351

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