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Basile [38]
3 years ago
6

On January 1, 2016, Woodstock, Inc. purchased a machine costing $40,000. Woodstock also paid $1,000 for transportation and insta

llation. The expected useful life of the machine is 6 years and the residual value is $5,000.How much is the annual depreciation expense assuming use of the straight-line depreciation method?A. $6,100.B. $6,000.C. $5,950.D. $5,750.
Business
1 answer:
VikaD [51]3 years ago
8 0

Answer:

B. $6,000

Explanation:

The computation of the annual depreciation expense under the straight-line method is shown below:

= (Original cost - residual value) ÷ (useful life)  

= ($41,000 - $5,000) ÷ (6 years)  

= ($36,000) ÷ (6 years)  

= $6,000

The original cost is computed below:

= Purchase value + transportation and installation cost

= $40,000 + $1,000

= $41,000

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Which one of the following is common between optimization using total value and optimization using marginal​ analysis?
Temka [501]

Common between optimization using total value and optimization using marginal​ analysis is:

Both techniques require the conversion of all costs and benefits into a common unit of measurement.

What is the principle of optimization at the margin?

The Principle of Optimization at the Margin states that an optimal feasible alternative has the property that moving to it makes you better off and moving away from it makes you worse off.

Optimization using total value:

calculates the change in net benefits when switching from one. alternative to another.

optimization using marginal analysis:

calculates the net benefits of. different alternatives.

Total Value analysis :

has a wide range of applications. The analysis can be used to assess an organization's key impacts, or provide more detailed information such as an assessment of the life cycle impacts of a product.

marginal​ analysis:

is an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity. Companies use marginal analysis as a decision-making tool to help them maximize their potential profits.

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5 0
1 year ago
Louis is reading the online report of the tuition and fees he owes for this semester of college. Since he has signed up for onli
Natalija [7]

The amount Louis just paid is considered to be the price.

What a price means or what it communicates to customers is called?

  • A price's significance or the message it sends to clients are referred to as Interpretation.
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3 0
1 year ago
A 4% S/A coupon bond with 4 coupons remaining has a BEY of 8.00%. You buy the bond a little over a month before you get the firs
ElenaW [278]

A 4% S/A coupon bond with 4 coupons remaining has a BEY of 8.00%,  is mathematically given as

DP=95.696. Option D is correct

<h3>What is the dirty price of this bond?</h3>

Generally, dirty price is simply defined as It's important to note that a "dirty price" is simply a bond pricing quotation that takes into account both the coupon rate and any interest that has already accumulated on the bond.

In conclusion, Dirty price

DP = (Clean price +  interest Accrued)

Therefore

DP=0.80*(4%*100/2)+2*(1-(1+4%)^(-3.20))/(4%)+100/(1+4%)^(3.20)

DP=95.696

CQ

A4% S/A coupon bond with 4 coupons remaining has a BEY of 8.00%. You buy the bond a little over a month before you get the first coupon. Specifically, the fraction of the 6-month period that has already elapsed is 0.80.

Calculate the dirty price of this bond.

O 81.370

85.216

93.471

o 95.696

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8 0
2 years ago
American​ Exploration, Inc., a natural gas​ producer, is trying to decide whether to revise its target capital structure. Curren
Marat540 [252]

Answer:

a) 9.00 %

b) 7.80 %

c) yes the weight of the debt increases here is more risk in the investment as the debt payment are mandatory and failing to do so result in bankruptcy while the stock can wait to receive dividends if the income statement are good enough

d) 9.00  %

e) The increase in debt may lñead to an increase in return of the stockholders if they consider the stock riskier than before and will raise their return until the WACC equalize at the initial point beforethe trade-off occurs

Explanation:

a)

WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})

Ke 0.12

Equity weight 0.5

Kd(1-t) = after tax cost of debt = 0.06

Debt Weight = 0.5

WACC = 0.12(0.5) + 0.06(0.5)

WACC 9.00000%

c)

WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})

Ke 0.12

Equity weight 0.3

Kd(1-t) = after tax cost of debt = 0.06

Debt Weight 0.7

WACC = 0.12(0.3) + 0.06(0.7)

WACC 7.80000%

d)

WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})

<em>Ke 0.16</em>

Equity weight 0.3

Kd(1-t) = after tax cost of debt = 0.06

Debt Weight 0.7

WACC = 0.16(0.3) + 0.06(0.7)

WACC 9.00000%

3 0
3 years ago
Frank Fronton decided to become a professional jai alai player. In January, Fronton joined a jai alai club where he could train
belka [17]

Answer:

$6,300

Explanation:

The computation of expenses that can be deducted is shown below:-

Expenses that can be deducted = Fee paid for club after getting contract(for 5 months) + Replacement cost + Travelling

= ($1,000 × 5) + $500 + $800

= $6,300

Therefore for computing the expenses that can be deducted we simply add  Fee paid for club after getting contract, replacement cost and travelling and the rest amount is not relevant for computation.

6 0
3 years ago
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