Answer:
$62,784
Explanation:
With MACRS depreciation , annual depreciation amount is calculated by multiplying each year' s rate by the original cost of the equipment.
Write down depreciation schedule as follows;
<u>Year </u> <u>Depreciation </u> <u>Book value </u>
Yr 1 0.2* 218000= 43600 218000 - 43600 = 174400
Yr2 0.32* 218000 = 69760 174400 - 69760 =104640
Yr3 0.192* 218000 = 41856 104640 - 41856= 62784
Therefore, at the end of 3 years, the book value of the equipment will be $62,784
Answer:
Required rate of return= 14.8
If the security is expected to return 15%, it is underpriced.
Explanation:
The required rate of return on the security can be calculated using the CAPM formula which states that
Required rate of return =rf + B(rm - rf)
where rf= risk free rate
B= beta of the security
rm = return on the market
Required rate of return = 
= 14.68%
If the security is expected to return 15%, it is underpriced, and is a good investment. Discounting the expected cash-flows from the security at this higher expected return of 15% is going to yield a lower price compared to what the investor is prepared to pay given his required rate of return of 14.68%.
Answer:
$13.06
Explanation:
Data provided in the question
Expected dividend pay every year = $1.10
And the equity cost of capital is 8.4%
So, the price expected to pay per share ten years in future is
= Expected dividend pay every year ÷ the equity cost of capital
= $1.10 ÷ 8.4%
= $13.06
By dividing the expected dividend by the equity cost of capital we can get the price
Inverse; rise; drop; drop; rise
It is a fact that there is an inverse relationship between interest rates and bond values in the secondary market. When interest rates rise, bond prices drop, and when interest rates drop, bond prices rise.
<h3>What is the relationship between interest rate and bond values?</h3>
Bond prices and interest rates go hand in hand. Bond prices typically decline as borrowing costs increase (when interest rates rise), and vice versa.
Most bonds have a fixed interest rate that increases in attractiveness when interest rates decline, increasing demand and bond price.
In contrast, a bond's price will drop if interest rates increase because investors will no longer value the lower fixed interest rate it offers.
Learn more about relationship between interest rate and bond prices here:
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Answer:
The correct answer is letter (1): True.
Explanation:
Implementing a horizontal approach within a firm might not always imply a smooth transition. Some employees may find it hard to communicate with their coworkers because of factors of their personalities or just because they are not familiar with it. In such cases, leaders must intervene as bridges of communication moreover when conflicts must be solved between subordinates.
