Answer:
2273
Explanation:
In this question, we are asked to calculate Tom Tom’s maximum depreciation for this first year.
The term maximum depreciation is accounting principle talks about to what extent has the value of an asset been used.
To calculate his maximum depreciation, we need to be conversant with some conventions. The mid-month convention is what we need to understand here. What the convention assumes is that an asset which is placed into service during a given month is assumed to have been placed into
Such service at the middle of such month in question. Also, it is also assumed that disposing an asset at the beginning of one month or any other time of the month is same as disposing the said asset at the middle of the month. This is what the mid month convention is talking about.
It must also be noted that Residential property has a 27.5-year recovery period. The depreciation is thus $2,273 ($100,000 x 2.273%). This gives us the value of the maximum depreciation
Answer:
6%
Explanation:
The computation of the margin of safety percentage is shown below;
The Contribution margin ratio is
= Contribution margin ÷Sales
= ($675,00 ÷ $270,000)
= 0.25
Now breakeven point in dollars is
= Fixed cost ÷ Contribution margin ratio
= ($63,750 ÷ 0.25)
= $255,000
We know that
Margin of safety = Total sales - Breakeven sales
= ($270,000 - $255,000)
= $15,000
Now Margin of safety % is
= MOS ÷ Total sale
= ($15,000 ÷ $270,000)
= 5.56%
= 6%
In general, it is true that if the frequency is higher, then you make more money. For example, suppose you have a capital 1$ and the interest rate can be either 50% compunded annually or 25% compounded semiannually (same total interest in a year, different compounding rate). In the first case you get 1.5$ back at the end of the year, while in the second case after 1 semester you have 1.25$. After 2 semesters, you have 1.56$. You cannot make infinite money this way though; you can at most gain a factor of 2.7 by reducing the intervals of compounding.
The correct answer is the highest frequency, namely when the interest is compounded as frequently as possible (as long as the total interest rate is the same).
Answer:
Option (D) 1.29%
Explanation:
Data provided in the question:
Treasury bill returns over four years :
4%, 3%, 2%, and 5%
Now,
Average return = (4% + 3% + 2%+ 5%) ÷ 4
= 3.5%
Standard deviation = [ ∑(Return - Mean)² ] ÷ [ n -1 ]
= [ (4% - 3.5%)² + (3% - 3.5%)² + (2% - 3.5%)² + (5% - 3.5%)² ] ÷ [ 4 - 1 ]
= 3.87% ÷ 3
= 1.29%
Hence,
Option (D) 1.29%
