Answer:
A
Explanation:
Accounting profit= total revenue - explicit cost
Total revenue =price x quantity sold
Explicit cost includes the amount expended in running the business.
They include rent , salary and cost of raw materials
Economic profit = accounting profit - implicit cost
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives
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.
Answer:
The amount that has to be deposited today is $6205.63
Explanation:
The given parameters are;
The annual interest rate for the first 5 years = 4 percent
The annual interest rate for the next 4 years = 4.6 percent
The annual interest rate for the final 8 years = 5.3 percent
Let the amount deposited be X, we have;
X × (1 + 0.04)⁵ + X × (1 + 0.04)⁵×(1.046)⁴ + X × (1 + 0.04)⁵×(1.046)⁴ ×(1.053)⁸ = $30,250
X ((1.04)^5 + (1 + 0.04)^5×(1.046)^4 + (1 + 0.04)^5×(1.046)^4 ×(1.053)^8) = $30,250
X × 4.875 = $30,250
X = $30,250/$4.875 = $6205.63
The amount that has to be deposited today = $6205.63.
Answer: Liquidation value
Explanation:
The liquidation value is one of the type of physical assets of an organization and the business value, real estate firms, directories and the equipment are refers as the liquidation value that helps in evaluating the overall worth of the firm.
This organizational value is lower as compared to the market value and it has less time for selling the products in the open market.
According to the given question, the liquidation value is refers as the actual amount of the stockholder expected value value in the market. Therefore, Liquidation value is the correct answer.
Answer:
d
Explanation:
In this scenario it seems that Jenny is being a persuasive ad viewer and a critical judge of the product. This can be said because she is basing her judgement on the fact that the ad features a famous marathon runner, even though the ad is specifically designed to persuade the viewer to buy the product by using these famous athletes. And just from the athlete she is judging that the product is good and being persuaded into buying it.
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