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pentagon [3]
3 years ago
10

A company purchases a remote site building for computer operations. The building will be suitable for operations after some expe

nditures. The wiring must be replaced to computer specifications. The roof is leaky and must be replaced. All rooms must be repainted and recarpeted and there will also be some plumbing work done. Which of the following statements is true?
a) The cost of the building will not include the repainting and recarpeting costs.
b) The cost of the building will include the cost of replacing the roof.
c) The cost of the building is the purchase price of the building, while the additional expenditures are all capitalized as Building Improvements.
Business
1 answer:
KIM [24]3 years ago
3 0

Answer:

b) The cost of the building will include the cost of replacing the roof.

Explanation:

As for the information provided,

We know that the capital expenditure is capitalized and that the revenue expenditure is provided in income statement.

The capital expenditure is added in the cost of fixed assets and then depreciated as part of it.

The entire replacement of roof will be a huge part of consideration of building, and is capital in nature. Thus, it shall be part of cost of building.

Remaining all expenses are not capital in nature.

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C) <span>fraud in the inducement.</span> is your answer. Hope this helps!
8 0
3 years ago
What is the most popular gaming company?<br><br> Answer: SQUIMIX
IgorLugansk [536]

Answer:

Nintendo

Explanation:

13.56 million dallors a day

8 0
3 years ago
If your paycheck was $800 each week, then the nominal value would be less than $800 as we adjust it for inflation. be more than
tia_tia [17]

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4 0
4 years ago
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Southern Tours is considering acquiring Holiday Vacations. Management believes Holiday Vacations can generate cash flows of $218
Pepsi [2]

Answer:

$519,799.59

Explanation:  

Discount rate = R = 14.50%

Year    Cash flows     Discount factor     PV of cash flows

1            218,000.00          0.873362            190,393.0131  

2           224,000.00          0.762762           170,858.6793

3           238,000.00          0.666168            <u>158,547.9011</u>

          Total of PV = NPV =                           <u> $519,799.59</u>

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Note:

Df = 1/(1+R)^Year

PV of cash flows = Cash flows x Df

7 0
3 years ago
Linke Motors has a beta of 1.30, the T-bill rate is 3.00%, and the T-bond rate is 6.5%. The annual return on the stock market du
anzhelika [568]

Answer:

cost of capital 16%

Explanation:

SML formula:

Ke= r_f + \beta (r_m-r_f)\\\\Where:\\r_f =$ risk free rate\\r_m= $ market rate\\\beta =non-diversifiable \:risk

r_f = 3%

β = 1.3

r_m = 13%

0.03 + 1.3(0.13-0.03)

firm's required return = .16 = 16%

4 0
3 years ago
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