Answer:
C. 20.00 percent
Explanation:
The computation of the accounting rate of return is shown below:
The formula to compute the accounting rate of return is shown below:
= Annual net income ÷ initial investment
where,
Annual net income is
= Net cash flows - depreciation expense
= $12,000 - $6,000
= $6,000
And, the initial investment is $30,000
So, the accounting rate of return on initial investment is
= $6,000 ÷ $30,000
= 20%
The depreciation expense is
= $30,000 ÷ 5 years
= $6,000
Answer:
False
Explanation:
The answer is False.
As Outside city limits has the minimum distance for parking cars from a warning cross indicating a railroad crossing is 50 meters (165 feet).
Answer:
XYZ Company
The PW (Present Worth) of depreciation deductions is $1,560.96
Explanation:
a) Data and Calculations:
Cost of Equipment = $4,800
Equipment's useful life = 5 years
Interest rate = 15%
Depreciation expense per year = $4,800/5 = $960
The asset was depreciated for two years, with Accumulated Depreciation totaling $1,920 (depreciation deductions).
Discounting $960 for two years, the present worth (present value) of the deductions = annual depreciation expense multiplied by present value annuity factor
=$960 * 1.626
= $1,560.96
b) The asset would have been depreciated for 5 years, but was declared obsolete during the third year. This means that it was only in use for 2 years. Therefore, in calculating the PW of the depreciation deductions, the annual depreciation expense of $960 is discounted to its present value using a present value annuity factor.
