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    Asset XYZ can be sold in two markets - Market A or Market B. In Market A, the price is $137 with $12 in transaction costs and $3 in transport costs, resulting in net proceeds of $125. In Market B, the price is $136 with $12 in transaction costs and $1 in transport costs, resulting in net proceeds of $124. If Market A is the principal market, the fair value is $134 after subtracting $3 in transport costs from the $137 price. If there is no principal market, the fair value is $137 based on the higher price available in Market A.

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    Asset XYZ can be sold in two markets - Market A or Market B. In Market A, the price is $137 with $12 in transaction costs and $3 in transport costs, resulting in net proceeds of $125. In Market B, the price is $136 with $12 in transaction costs and $1 in transport costs, resulting in net proceeds of $124. If Market A is the principal market, the fair value is $134 after subtracting $3 in transport costs from the $137 price. If there is no principal market, the fair value is $137 based on the higher price available in Market A.

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    17 views1 page

    Câu 5

    Uploaded by

    Phan Thị Mỹ Duyên
    Asset XYZ can be sold in two markets - Market A or Market B. In Market A, the price is $137 with $12 in transaction costs and $3 in transport costs, resulting in net proceeds of $125. In Market B, the price is $136 with $12 in transaction costs and $1 in transport costs, resulting in net proceeds of $124. If Market A is the principal market, the fair value is $134 after subtracting $3 in transport costs from the $137 price. If there is no principal market, the fair value is $137 based on the higher price available in Market A.

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    Question 5 (1 marks) – CLO1

    Asset XYZ is sold in two different active markets.


    In Market A, the price that would be received is $137; transaction costs are $12 and the costs to
    transport Asset XYZ to Market A are $3.
    In Market B, the price that would be received is $136; transaction costs are $12 and the costs to
    transport Asset XYZ to Market B are $1.
    Determine the fair value of asset XYZ if:
    a. Market A is the principal market.
    b. There is no principal market.
    Bài làm

    Market A Market B

    Price $ 137 $136


    Transaction costs $ 12 $12
    Net amount received $ 125 S 124
    Transport cost $3 $1
    a. Market A is the principal market
    FV= Price – Cost ( Transprot)
    = $137 - $3= $ 134
    b. No principal market
    FV= $137

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