Answer with explanation:
Part 1. Straight-line depreciation can be calculated using the following formula:
Straight-line depreciation = (Cost of Asset - Residual Value) / Useful Life
Now by putting the values of each parameter, we have:
Straight-line depreciation = ($135,000 - Zero) / 5years = $27,000
So this depreciation will be charged to the asset to remainder of its life.
Part 2. We can calculate depreciation using double declining balance method whose formula is as under:
Double Declining Balance Depreciation = 2 X Cost of the asset/Useful Life
By putting values, we have:
Double Declining Balance Depreciation = 2 * $135,000 / 5 Years = $54,000
The depreciation would be charged each year unless it fells below the salvage value of the asset, which in this question is given and is zero.
Part 3.
Following are the main questions that we must consider before opting to any depreciation method:
- Does the cost of the asset chosen is accurate and in-accordance to International Financial Reporting Standards.
- Does the estimated Residual value of the asset is forecasted accurately. International accounting standard IAS 16 says that the scrap value must be discounted and its present value must be considered as a scrap value.
- Is the useful life of the asset estimated is in-accordance to the pace of technological advances?
- The asset's fair value must be considered each year to analyze whether or not the asset value in the market is aligned with our carrying value calculated or not.
So these were the factors which decides which method of depreciation must be opted or what estimate changes are required in calculating the fair value of the asset.
The stock price is mathematically given as
P=$57.64
<h3>What is the
stock price?</h3>
Generally, the equation for is Value after year mathematically given as
V= $1454.25
Hence, the current value is mathematically given as
I=Discounting factor equal to the future cash flows multiplied by their present value
I=$1063.508769
current value for ordinary stock
I'=$1037.508769million
In conclusion, the stock price is
P=(1037.508769/18)
P=$57.64
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Answer:
c.530,000 grams
Explanation:
Calculation for How much of the raw material should the company purchase during the year
First step is to prepare the Production Budget
PRODUCTION BUDGET
Budgeted unit sales 170,000
Add desired ending finished goods inventory
32,000
Total 202,000
(170,000+32,000)
Less beginning finished goods inventory (22,000)
Required production in units 180,000
(202,000-22,000)
Second step is to prepare Materials Budget
MATERIALS BUDGET
Raw materials required for production 540,000
(180,000*3 grams)
Add desired ending finished goods inventory
42,000
Total raw materials needed 582,000
(540,000+42,000)
Less beginning finished goods inventory (52,000)
Required material purchases 530,000 grams
(582,000-52,000)
Therefore the amount of the raw material that the company should purchase during the year is $530,000 grams
Answer:
The investment in stock H will be $104837.5 while the investment in stock L will be $145162.5
Explanation:
The portfolio return is the weighted average return of the individual stocks that form up the portfolio. The weightage of each stock in the portfolio is the investment in a stock as a proportion of investment in the portfolio.
Let x be the weightage of Stock H.
Weightage of Stock L will be (1-x).
Portfolio return = wH * rH + wL * rL
Plugging in the values,
0.111 = x * 0.129 + (1-x) * 0.098
0.111 = 0.129x + 0.098 - 0.098x
0.111- 0.098 = 0.031x
0.013 / 0.031 = x
x = 0.41935 or 41.935% rounded off to 3 decimal places
(1-x) = 1 - 0.41935 = 0.58065 or 58.065%
Investment in Stock H = 250000 * 41.935% = $104837.5
Investment in Stock L = 250000 * 58.065% = $145162.5
