An escalade's useful life expectancy is 3 years. So, 62000/3, so the depreciation claim is $20,667.00
Expected rate of return Probabilities
Booming 22% 5%
Normal 15% 92%
Recession 2% 3%
The expected rate of return on this stock is solved by multiply each expected rate of return to its corresponding probability and getting the sum of all products.
Booming: 0.22 x 0.05 = 0.011
Normal: 0.15 x 0.92 = 0.138
Recession 0.02 x 0.03 =<u> 0.0006</u>
Sum total 0.1496 or 14.96% is the expected rate of return on this stock
Answer:
Bargain Electronics would realize Net Income of $35,200 by accepting the special order.
Decision : The special order should be accepted.
Explanation:
<u>Analysis of net income effect of accepting the special order</u>
Sales ( 3,200 units × $28) $89,600
Less Expenses :
Variable ( 3,200 units × $15) ($48,000)
Shipping Costs ($2 × 3,200 units ) ($6,400)
Incremental Income / (loss) $35,200
<em>Note that, the fixed costs are irrelevant for this decision. This is because they will remain the same whether or not the special order is accepted.</em>
Answer:
- Tax status = Ordinary Asset
- Gain = $60,000
Explanation:
As the company expensed the asset fully in the year of purchase instead of capitalizing it, the asset is an ordinary asset not a capital one which is capitalized. That is the tax status.
The gain on an ordinary asset is the amount that it was sold for which in this case is $60,000.
Tax status = Ordinary Asset
Gain = $60,000
The promotion mix element that is facilitated by words of mouth is ADVERTISING.
Word of mouth advertising is a form of unpaid spread of positive marketing information which move from one person to another. The method involves passing information across to other people by meaning of oral communication.
