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3 years ago

Computing first-year depreciation and book value

Business

1 answer:

MArishka [77]3 years ago

4 0

Answer:

1. Compute Austin Airlines' first-year depreciation expense on the plane using the following methods:

a. Straight-line

depreciation expense for first year = ($33,500,000 - $5,500,000) / 5 = $5,600,000 per year

b. Units-of-production

depreciation per mile = ($33,500,000 - $5,500,000) / 4,000,000 = $7 per mile

depreciation expense for first year = $7 x 1,100,000 = $7,700,000

c. Double-declining-balance

depreciation expense for first year = 2 x 1/5 x $33,500,000 = $13,400,000

2. Show the airplane's book value at the end of the first year for all three methods.

a. Straight-line

book value at end of first year = $27,900,000

b. Units-of-production

book value at end of first year = $25,800,000

c. Double-declining-balance

book value at end of first year = $20,100,000

Explanation:

Purchase cost = $33,500,000

useful life of 5 years (or 4,000,000 miles) and residual value of $5,500,000

expected use during first year of 1,100,000 miles

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Global market channels involve a firm producing goods in:______

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Answer:

A. Their home country and exporting them to other countries.

Explanation:

A global market channel generally explains the production of commodities by a certain or group of firms and goods by a home country and exporting them to other countries. This is seen generally in the production of phones, laptops, tv brands refrigerators and a whole lot of products amongst tier 1 or tier 2 countries and are been shipped to lowest their countries and other tier countries. This is seen to boost the economy and international trade friendship of either countries though the country at the recieving end is loosing per capital but at the end, we need each other to grow and live.

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3 years ago

Ellen purchased a dishwasher, which cost $315 before the 9. 22% sales tax. She used the machine an average of 10 times per week

antiseptic1488 [7]

Cost is the amount of spending on a product or service. The lifetime cost of the dishwasher was $1029.8 which is $1030 approximately.

Cost is the amount incurred on acquiring a product or using a service. Cost is the value of the product or service.

The lifetime value of an asset is the total expense incurred on the asset from acquisition till disposal.

The lifetime cost of the dishwasher will be the sum of its cost, sales tax, and water and electricity charges for 6 years.

The water and electricity charges are $0.09 and $0.13 per use. The total number of times the dishwasher is used can be calculated as:

The number of use per week are 10, number of weeks in a year are 52, and number of years of use are 6.

$\rm Number\:of\:uses = 10\:times\times 52\:weeks\:\times6\:years\\\\\rm Number\:of\:uses = 3120\:times$

Therefore, the water and electricity charges will be:

$\rm Water\:charges = 3,120 \times \$0.09\\\\\rm Water\:charges = \$280.08\\\\\rm Electricity \:charges = 3,120\times \$0.13\\\\\rm Electricity \:charges = \$405.60$

The cost of the dishwasher will be a combination of its purchase price and sales tax. Therefore:

$\rm Cost\:of\:dishwasher = \$315 + 9.22\%\\\\\rm Cost\:of\:dishwasher = \$344.043$

The lifetime cost of the dishwasher will be:

$\rm Lifetime\:cost\:of\:dishwasher = \$344.043 + \$280.08 +\$405.60\\\\\rm Lifetime\:cost\:of\:dishwasher = \$1029.7\\\\\rm Lifetime\:cost\:of\:dishwasher = \$1030 (approximately)$

Therefore the correct option is A.

Learn more about cost here:

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2 years ago

The required reserve ratio is 0.05. If the Federal Reserve buys $1,000,000 worth of bonds from a bond dealer who has her accoun

Radda [10]

Missing information:

total deposits in bank XYZ = $4,000,000

total reserves = $3,800,000

Answer:

the required reserve = $250,000

excess reserves = $4,550,000

Explanation:

required reserve ratio = 5%

the Fed buys $1,000,000 worth of bonds

the $1,000,000 are deposited entirely in bank XYZ

total checkable deposits will increase to $5,000,000

the required reserve = $5,000,000 x 5% = $250,000

excess reserves = total checkable deposits - total loans - required reserves = $5,000,000 - $200,000 - $250,000 = $4,550,000

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3 years ago

During a recent lengthy strike at Morell Manufacturing Company, management replaced striking assembly line workers with office w

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Answer: D) Favorable Unfavorable

Explanation:

To begin, it is worthy of note that in Variance, if something is said to be Favourable, it means a negative Variance because less resources than planned were spent. When it is Unfavourable, it means a positive balance variance.

Now, The formula for Labour Rate Variance is as follows,

LABOUR RATE VARIANCE=(ACTUAL RATE-STANDARD RATE)*ACTUAL HOURS WORKED

Seeing as the old workers were being paid $18, and the new office ones were paid $10, we can see that to be the actual rate was less than the standard rate. This would mean that there was a FAVOURABLE balance.

Labour Efficiency is calculated in a similar way,

LABOUR EFFICIENCY VARIANCE=(ACTUAL HOURS WORKED-STANDARD HOURS)*STANDARD RATE.

Now, these are Office workers not assemblyline workers. They do not have the experience to work in such a way that they produce as fast or as efficiently as their striking Assemblyline colleagues.

This would then mean that their actual hours will be MORE than the standard rate which can only lead to an UNFAVOURABLE BALANCE.

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3 years ago

lord penrose a financial analyst for the equitable life insurance society has just been asked to evaluate two mutually exclusive

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Answer:

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Explanation:

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2 years ago