Answer and explanation:
Location is one of the many factors businesses must consider at the moment of starting operations. Commercial areas tend to have higher rent and property prices. Typically, businessmen deal with it by increasing their products price so they can cover expenditures and make a profit. At the same time, most consumers are willing to pay the higher price for the product because it removes the need for relocation even if it could imply moving one or two blocks away.
Answer:
b. $360,000.
Explanation:
Data provided in the question
Purchase value of the patent = $720,000
At the time of purchase, the patent life is 15 years
And, the useful life of the patent is 10 years
So, the amortization expense recorded value is
= $720,000 ÷ 10 years × 5 years
= $360,000
The five years is counted from the year 2006 to the year 2011
The correct option is (a) sales; average book value of fixed assets.
The fixed asset turnover ratio is computed as sales divided by average book value of fixed assets.
The fixed asset turnover ratio demonstrates the effectiveness of a company's current fixed assets in driving sales. A greater ratio suggests that management is making better use of its fixed assets. No information can be gleaned from a high FAT ratio about a company's capacity to produce reliable earnings or cash flows.
The ratio of sales to the value of fixed assets is known as fixed-asset turnover. It shows how effectively the company is generating sales by utilizing its fixed assets.
A greater ratio is typically preferred since it suggests that the business is effective at producing sales or revenues from its asset base. A lower ratio suggests that a business is not utilizing its resources effectively and may be experiencing internal issues.
Learn more about fixed asset turnover ratio
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Answer:
D. Principal and interest
Answer:
$5,200,000
Explanation:
We know that
Cap rate = Net operating income ÷ Purchase price of the property
where,
Cap rate is 6.25%
And, the net operating income on the property is $325,000
So, the purchase price of the property would be
= $325,000 ÷ 6.25%
= $5,200,000
We simply applied the above formula to find out the purchase value of the property
