Answer:
2080 dollars
Explanation:
Given that Cardinal Industries purchased a generator that cost $11,000
cost of generator = 11000
Estimated life = 5 years
Residual value =1000
Hours =5000
Depreciation per unit hour = (Cost - residual value)/total lifetime hours
=
For first year the generator was used for 1,040 hours.
Hence depreciation to be charged in I year
=
answer is 2080 dollars.
Answer:
The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the discounted value of its more distant (in the future) cash flows.
Explanation:
The perpetuities can becalculate as follow
C/rate = Perpetuities
the reasoning behind this formula:
If we calculate limit whe ntime is infite,
because at more time 1 + r gets closer and closer to 0
we get on the dividend
1 - 0
So we have C x 1/i = C/i
Next part would be why the first cash flow is more relevant than the subsequent cash flow:
Here if time increases, then the divisor get closer to ∞ so we have
P ( a constant) /∞ = 0
So the first cashflow is more relevant than the more distant cash flow