Answer: See explanation
Explanation:
a. The amount of depreciation for 2017 using financial accounting straight-line depreciation will be:
= $39000 × 8months/5 years
= $39000 × 8months / 60months
= $39000 × 8/60
= $5200
b. The amount of depreciation for 2017 using the straight-line depreciation election will be:
= $39000 × 10%
= $39000 × 0.1
= $3900
c. The amount of depreciation for 2017, including bonus depreciation but no election to expense, that Mike could deduct using the MACRS tables will be:
= ($39000/2) + $3900
= $19500 + $3900
= $23400
d. If there is no income limit on the expense election, the amount of depreciation for 2017 including bonus depreciation and the election to expense that Mike can deduct will be:
= $25000 + $7000 + $1400
= $33400
Answer:
The after tax cash flow will be $112,000.
Explanation:
The market value of the fixed asset is given at $112,000.
The book value of the same asset is $112,000.
The marginal tax rate is 39%.
The after tax cash flow will be
= 
= 
= 
= $112,000
Answer:
speculative bubble
Explanation:
In simple words, A financial bubble is a increase in asset prices within a certain market, product, or investment vehicle that is caused by optimism as contrasted to certain asset class dynamics.
Typically, a financial bubble is triggered by unrealistic expectations of potential prosperity, market inflation or other activities that may cause asset prices to rise.
This optimism and subsequent action drives greater levels of trade, and as more people converge around the increased demand, buyers outstrip sellers, driving values above what an unbiased intrinsic worth analysis would imply.
