There are three main financial statements that can be affected by buying a piece of equipment for a company.
They are: (1) balance sheets; (2) income statements; and (3) cash flow statements
Balance sheets show what a company owns and what it owes at a fixed point in time so buying a piece of equipment will show an increase in the company’s assets and decrease in cash Income statements which shows how much money a company made and spent over a period of time will report an increase in the expenses resulting to a lower net income.
Cash flow statements which show a decrease in net cash due to buying of the equipment.
Answer:
Depreciation: $4,000.00
Variable costs : $914.81
Explanation:
The value of the car when new = $19,860.00
Values after two years =$11,860.00
Accumulated depreciation for two years
= $19,860.00 - $11,860.00
=$8,000.00
Assuming straight depreciation method, depreciation each of the two years
=$8,000.00/2
=$4,000.00
Variable costs are the cost that changes with usages. In this case, variable costs are gas and oil, lube, and miscellaneous.
Variable costs = $845.96 + $68.85
Variable costs = $914.81
Manuel is retired and receives a fixed payment from his pension each there is inflation when the buying power of his pension will fall
This is further explained below.
<h3>What is
inflation?</h3>
Generally, Inflation refers to the rate at which prices continue to grow during a certain period of time, and the term may also refer to inflation itself. In most cases, inflation is assessed on a broad scale, such as the overall increase in prices or the growth in the cost of living in a particular nation.
To put inflation in its most basic form, it may be thought of as the general upward trend in the prices of goods and services over time. What this implies is that a dollar spent now won't purchase as much in the future. In other words, it will lower your ability to purchase things in the future.
In conclusion, Manuel is now retired and receives a certain amount from his pension on an annual basis. In the event that there is inflation, Manuel will be able to buy a lesser total amount with his pension money.
Read more about inflation
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Answer:
The investors should be willing to pay $49.50 for this stock
Explanation:
Hi, first, we need to find out what the cost of equity is in order to find the price of the stock. that is:
Where:
rf= Risk free rate
rm=return on the market
r(e)=cost of equity
After finding r(e), we would need to find the price using the following equation.
Where:
Do= last dividend
g= growth rate
r(e)= cost of equity.
ok, so, let´s find out what the cost of equity is.
So, the r(e)=15%, now let´s find the price of this stock
Therefore, the price of this stock is $49.50
Best of luck.
