Answer:
the net book value of the asset halfway through its useful life will be less than if straight-line depreciation is used.
Explanation:
Let me use an example to illustrate this.
An asset has a useful life of 4 years. It costs $1000. It has a salvage value of 0
If the straight line depreciation method is used , the depreciation expense every year = $1000/ 4 = $250
The net book value halfway through its useful life = $1000 - ($250 x 2) = $500
If double declining method is used, the depreciation expense in the first year would be = 2/4 x $1000 = $500
The net book value at the beginning of year 2 = $1000 - $500 = $500
Depreciation expense in year 2 = 2/4 x $500 = $250
The net book value at the beginning of year 3 = $500 - $250 = $250
We can see that the net book value halfway through the useful is lower when double declining depreciation method is used
Answer and Explanation:
a. The computation of the weighted average contribution margin ratio is shown below:
The Contribution margin ratio is
= (Combined contribution ) ÷ (Sales)
= ($60,000 + $180,000) ÷ ($1,000,000)
= ($240,000) ÷ ($1,000,000)
= 0.24
b. Now the break even point in dollars is
= Fixed cost ÷ contribution margin ratio
= $300,000 ÷ 0.24
= $1,250,000
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Answer:
3.55 years
Explanation:
The payback period is the length of time it takes for Beyer Company to recoup the initial investment of $370,000.
In other words, the number of years for the net cash flows of the project to equate the initial investment amount of $370,000 as shown in the attached excel file for Beyer company's payback computation
