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Inessa [10]
2 years ago
15

On January 1, 2008 an asset was acquired for $30,000. Its useful life was expected to be 10 years and the salvage value is expec

ted to be $0. After four years of use, the company realized the asset would be useful for only three more years. (In other words, the total useful life of the asset will be seven years instead of the original 10 years.) The company uses the straight-line method of depreciation. The Depreciation Expense in each of the years 2012, 2013, and 2014 will be $___
Business
1 answer:
Sladkaya [172]2 years ago
6 0

Each of the years 2012, 2013, and 2014 will incur a $6,000 depreciation expense.

figured out as follows:

Amount to Be Depreciated = Cost of $30,000 less Estimated Salvage Value of $0.

For the years 2012, 2013, 2014, and 2015, $30,000 divided by ten years equals $3,000 every year.

The Book Value is $18,000 after 4 years ($30,000 minus $12,000).

Depreciation of the $18,000 book value will be required over the remaining 3 years= $6,000 annually.

learn more about Depreciation Expense here <u>brainly.com/question/25785586</u>

#SPJ4

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Sally Smith incurred expenses of $800 in June which she paid in July. She declared these expenses on her June income statement.
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Accrual

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Answer:

Present Value 5,715,331.32

We are going to accept the project only if the initial investment is at 5,715,331 or below in order to achieve the return to support the cost of capital structure of the company

Accepting a project with a higher cost will not generate enought cashflow to sustain the patyment of debt and the return expected from the stockholders therefore, will generate a economic result and investor will leave the company for other which can sustain their desired return.

Explanation:

We are going to discount the yearly cash-flow at the given rate of 12.50%

then, the terminal value which is the present value of the future period will also be discounted at this rate.

The sum of all this will be the present value of the firm.

\left[\begin{array}{ccc}$Year&$Cash Flow&$Discounted\\1&575000&511111.11\\2&625000&493827.16\\3&650000&456515.77\\4&725000&452613.93\\5&850000&471689.61\\$terminal&6000000&3329573.74\\Present&Value&5715331.32\\\end{array}\right]

The formula we use the present value of a lump sum:

\frac{Maturity}{(1 + rate)^{time} } = PV

We are going to accept the project only if the initial investment is at 5,715,331 or below in order to achieve the return to support the cost of capital estructure of the company

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So for a risk average person to take on the investment with higher standard deviation it means the rate of return will be Higher.

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