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3 years ago

Depreciation is a _____, a cost that cannot be affected by any future action.

2 answers:

7 0

Depreciation is a sunk cost. It is the value lost on an asset after consumption. In accounting, depreciation cost qualifies as a sunk cost because it is already lost and cannot be recovered. For that reason, it is correct to ignore depreciation cost when determining the future course of a business.

Allisa [31]3 years ago

6 0

Correct Answer is B, Sunk Cost.

Depreciation is a Sunk Cost. A cost that cannot be affected by any future action.

Depreciation is basically a cost of an asset that reduces over time.

Sunk Cost is the cost that has already acquired and cannot be pulled through.

So Depreciation is a sunk cost. A cost that has already been incurred and cannot be recovered. All assets depreciate over time.

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In addition to the following closing costs listed below, the buyer pays a realtor commission that is 3.5% of the loan amount. Cl

kobusy [5.1K]

Answer:

$8,097

Explanation:

8 0

3 years ago

Last year, Bad Tattoo Co. had additions to retained earnings of $4,780 on sales of $95,560. The company had costs of $75,720, di

fredd [130]

Answer:

e. $6,042

Explanation:

Net income of Bad tattoo co. = Addition of retained earnings + Dividends

= $4,780 + $2,980

= $7,760

Income before tax of Bad tattoo Co = Net income / (1-tax rate)

= $7,760 / (1-34%)

= $7,760 / 0.66

= $11,758

But,

Income before tax = Sales - Costs

- Depreciation expense - Interest expense

$11,758 = $95,560 - $75,720 - Depreciation expense - $2,040

$11,758 = $19,840 - Depreciation expense - $2,040

Depreciation expense = $19,840 - $11,758 - $2,040

Depreciation expense = $6,042

8 0

3 years ago

If the discount rate is 21% and the steady growth rate after 3 years is 2%, what should the stock price be today

jonny [76]

Complete Question:

Tattletale News Corp. has been growing at a rate of 20% per year, and you expect this growth rate in earnings and dividends to continue for another 3 years.

a. If the last dividend paid was $10, what will the next dividend be? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Dividend $

b. If the discount rate is 21% and the steady growth rate after 3 years is 2%, what should the stock price be today? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Stock price $

Answer:

Requirement A. $12 per share

Requirement B. $44.14 per share

Explanation:

Requirement A.

The next dividend can be calculated using the following equation:

Next Dividend = D0 * (1 + g)

Here

D0 is the current dividend which is $10 and g is the Growth Rate which is 20% for the first three years

By putting values, we have:

Next Dividend = $10 * (1 + 20%)

= $12 per share

Requirement B.

Year Dividend Growth Rate New Dividend

1 10 20% 12

2 12 20% 14.40

3 14.4 20% 17.28

4 17.28 2% 17.63

Stock Price = $17.63 * (1 + 2%) / (21% - 2%) = $94.62

The above stock price calculated is the value of stock at the end of year 4. To discount it back to year zero, we will discount it by 21%.

Stock price at year0 = $94.62 / (1 + 21%)^4 = $44.14 per share

6 0

3 years ago

It is advisable to spend less money on wants than you do on needs.true or false

aev [14]

True, you don’t want to spend more money on wants instead of needs because if you do you won’t have enough money for things that you really need.

5 0

3 years ago

Read 2 more answers

Wildhorse Co. uses a periodic inventory system. Details for the inventory account for the month of January 2017 are as follows:

OLEGan [10]

Answer:

Ending inventory= $1514

Explanation:

Giving the following information:

Beginning inventory: 320u*$5.00= $1600

Purchase, (1/15/2017)= 160u*5.70= $912

Purchase, (1/28/2017)= 160u*5.90= $944

Ending inventory= 260u

The company uses FIFO (first in, first out).

What is the value of ending inventory?

Ending inventory= 160u*5.90 + 100u*5.70= $1514

6 0

3 years ago