High and unexpected inflation has a greater cost Group of answer choices for savers in low income tax brackets than for savers i
1 answer:
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Answer:
$45,000
Explanation:
Data provided in the question:
Selling cost of the furniture on May 1, 2015 = $300,000
Original cost of the machine on January 1, 2008 = $750,000
Depreciable Life of the furniture = 10 years
Salvage value = $75,000
Now,
Annual depreciation =
or
Annual depreciation =
or
Annual depreciation = $67,500 per year
The total duration from the date of purchase to date of selling
= 7 years 4 months
or
= 7 × 12 + 4 months
= 88 months
= years
therefore,
The total accumulated depreciation till the date of sale
= Annual depreciation × Duration
= $67,500 ×
= $495,000
Thus,
The book value on May 1, 2015
= Purchasing cost - Accumulated depreciation
= $750,000 - $495,000
= $255,000
Hence,
The gain recognized = Selling cost - Book value
= $300,000 - $255,000
= $45,000
Answer:
Efficiency requires that one lighthouse is built since the willingness to pay of all the residents together is larger than the cost of providing the lighthouse
Explanation:
Since the lighthouse is a public good, according to the coase theorem, if the combined willingness to pay for the lighthouse of all of the people living on the islands is higher than the cost of the lighthouse, then a lighthouse should be built.
The total willingness to pay is:
The population willingness to pay is higher than the cost of building one lighthouse ($2000) but lower than the cost of building two lighthouses ($4000). Therefore, efficiency requires that one lighthouse is built since the willingness to pay of all the residents together is larger than the cost of providing the lighthouse.