Answer:
The correct answer is $9187.5.
Explanation:
According to the scenario, the given data are as follows:
Asset cost = $140,000
Residual value = $42,000
Life period = 8 years
So, Annual depreciation can be calculated by using following method:
Annual depreciation = ( Asset cost - Residual value) ÷ Life period
= ($140,000 - $42,000) ÷ 8
= $12,250
As depreciation is to be recorded till Dec.31
So, total time period = Apr - Dec = 9 months
So, Depreciation expense till Dec.31 = $12,250 × (9 ÷ 12)
= $9,187.5
Hence, Depreciation expense till Dec.31 is $9,187.5.
Answer:
The second project should be chosen. Because the present value of the second project is greater than that of the first project.
Explanation:
The project that should be chosen can be determined by comparing the present value of both projects.
Present value is the cash flows from a project discounted at the discount rate.
Present value can be found using a financial calculator;
For project 1,
Cash flow each year from year one to six is $52,000
Discount rate = 15%
Present value =$196,793.10
For project 2,
Cash flow each year from year one to eight is $48,000
Discount rate = 15%
Present value =$215,391.43
The second project would be chosen because its present value is greater than that of the first project.
I hope my answer helps you
That is true, hope that helps !
Answer:
True .....this is because the entrepreneur is the risk bearer of the business...he is liable for any profit/loss.
Answer:
a) H0: u = presence of a unit root
HA: u ≠ presence of a unit root ( i.e. stationary series )
b) t stat = -0.064
c) We will reject the Null hypothesis and the next step will be to accept the alternative hypothesis
d) It is not valid to compare the estimated t stat with the corresponding critical value because a random walk is non-stationary while the difference is stationary because it is white noise
Explanation:
<u>a) stating the null and alternative hypothesis</u>
H0: u = presence of a unit root
HA: u ≠ presence of a unit root ( i.e. stationary series )
<u>b) performing the test </u>
critical value = -2.88
T stat = coefficient / std error
= -0.02 / 0.31 = -0.064
c) From the test, the value of T stat > critical value we will reject the Null hypothesis hence the next step will be to accept the alternative hypothesis
d) It is not valid to compare the estimated t stat with the corresponding critical value because a random walk is non-stationary while the difference is stationary because it is white noise
