SteelTubes had sales of $300 million this year. Expense

SteelTubes had sales of $300 million this year. Expenses were $250 million. Aside from these figures the company also invested in new mills for carbon steel tubing complete with peripheral loading straighten- ing and coiling equipment plus facility reconfiguration totaling $14 million. SteelTubes believes the usable life of the mill will be only 7 years owing to technological advances. There were no other financial considerations. a. Looking strictly at cash flows what will be reported as the financial gain or loss? Is this a fair representation of financial performance? b. If for internal financial reporting the manufacturer writes off equal amounts of the capital investment over the usable life beginning this year what will be the reported financial gain or loss?
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