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pickupchik [31]
2 years ago
14

Problem 11-1 Jain Mart is to depreciate an asset bought for $500,000 using the SOYD method over a life of 8 years. If the deprec

iation charges in year 3was $80,000, determine the salvage value used in computing the depreciation charges in year 3. A. $50,000 B. $20,000 C. $1
Business
1 answer:
pickupchik [31]2 years ago
5 0

Answer:

B. $20,000

Explanation:

Depreciation in year 3 = $80,000

According to the sum of the Years' Digits Depreciation, the depreciation for an asset bought for $500,000 and an expected life of 8 years, at year 3, is given by:

D_{y=3}=\$80,000 = \frac{8-2}{8+7+6+5+4+3+2+1}*(\$500,000-Salvage) \\Salvage = 6*(\frac{\$500,000}{6} -\$80,000)\\Salvage=\$20,000

The salvage value used in computing the depreciation charges is $20,000.

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If the marginal product of capital net depreciation equals 8 percent, the rate of growth of population equals 2 percent, and the
Sphinxa [80]

Question:                                                                                                                                                                                                                                                                                  

If the marginal product of capital net depreciation equals 8 percent, the rate of growth of population equals 2 percent, and the rate of labor-augmenting technical progress equals 2 percent, to reach the Golden Rule level of the capital stock, the ____ rate in this economy must be _____.      

A) saving; increased  

B) population growth; decreased

C) depreciation; decreased

D) total output growth; decreased

Answer

The correct answer is  A) <u>Saving</u> rate of the economy must be i<u>ncreased</u> in order for the economy to reach the Golden Rule Level of the Capital Stock.

Explanation

Golden Rule Level of the Capital Stock is the level at which

MPK = δ,

Where MPK is Marginal Product; and δ the depreciation rate;

so that the marginal product of capital equals the depreciation rate.

In the Solow growth model, a <em>high saving rate results in a large steady-state capital stock and a high level of steady-state output.</em> A low saving rate results to a small steady state capital stock and a low level of steady-state output. Higher saving leads to faster economic growth only in the short run. An increase in the saving rate raises growth until the economy reaches the new steady state. That is, if the economy retains a high saving rate, it will also maintain a large capital stock and a high level of output, but it will not maintain a high rate of growth forever .  

5 0
2 years ago
Kimberly Young started her own consulting firm, Young Consulting Inc., on May 1, 2022. The following transactions occurred durin
Softa [21]

Answer:

I used an excel spreadsheet to answer this question.

           

Download pdf
7 0
3 years ago
The following is the stockholders' equity section of Harbor Co.'s balance sheet on December 31: Common stock $10 par, 100,000 sh
Murljashka [212]

Answer:

The book value of shares is $10

Explanation:

The balance of shareholders equity is $2,200,000.This comprises of retained earnings of $800,000 and Issued Share Capital of $1,400,000(for 140,000 units of shares)

To ascertain the unit of shares,see below:

45000units= $450,000

15000units reacquired at $150,000

Which also means that $1,100,000 is for 110,000units of shares.

In each of these cases highlighted above share price is $10

for instance:$450,000/45000shares=$10

$150,000/15000=$10 e.t.c

8 0
3 years ago
If Alex deposits $1,000 from her paycheck into her checking account and, at the same time, increases her credit card balance by
Marina86 [1]

Answer:

option (A) -$500; decreases by $500

Explanation:

Data provided in the question:

Amount deposited = $1,000

Increase in credit card balance = $1,500

Now,

Deposit adds to assets whereas increase in credit card balances adds to liabilities

Therefore,

Savings = Deposits - Increase in credit card balances

= $1,000 - $1,500

= - $500

Here,

negative sign depicts the decrease in wealth

Hence,

The correct answer is option (A) -$500; decreases by $500

8 0
2 years ago
Scampini Technologies is expected to generate $25 million in free cash flow next year, and FCF is expected to grow at a constant
DedPeter [7]

Answer:

$9.26 per stock

Explanation:

using the discounted cash flow model, the value of Scampini Technologies is:

company's value = free cash flow / (required rate of return - growth rate) = $25,000,000 / (13% - 7%) = $25,000,000 / 6% = $416,666,667

since the company does not have any debt, the price of each stock is:

stock price = total value of the company / total outstanding stocks = $416,666,667 / 45 million shares = $9.26 per stock

8 0
3 years ago
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