Answer:
a. The amount and character of Luke’s recognized gain on the building is $170,000
b. The amount and character of Luke’s recognized gain on the land is $80,000
Explanation:
a. In order to calculate the the amount and character of Luke’s recognized gain or loss on the building, we would have to use the following formula:
amount of gain or loss building= ($325,000-$200,000) + $45,000 = $170,000 gain
b. In order to calculate the amount and character of Luke’s recognized gain or loss on the land, we would have to use the following formula:
b. amount of gain or loss on land= ($210,000-$130,000) = $80,000 gain
Answer:
avoid full liability for the business
Explanation:
Based on the scenario being described, the best reason for Mario and Johnny to create a general partnership is that they want to avoid full liability for the business. This makes creating a general partnership great since this is a business arrangement by two or more individuals who agree to share in all assets, profits, and financial and legal liabilities of a jointly-owned business, meaning sharing all liability for the business as well.
Answer:
The expected return on stock =
60.5+0.15-50.09=10.56
10.56/50.09=0.21= 21%
Yes We should buy this stock as its has an expected return of 21% and our required rate of return is 11.8%
Explanation:
Answer:
The present worth of aircraft = $29137.82
Explanation:
Given the cost of money (r ) = 10%
The initial cost of small aircraft = $35000
Annual repair and maintenance costs (A) = $20000
Salvage valaue = $10000
Now calculate the present value of aircraft by adding the initial cost of annual maintenance and salvage value and subtracting the initial cost.
![Present worth = initial cost + \frac{A[1-(1+r)^{-n}]}{r} - \frac{Salvage \ value}{(1 + r)^{n}} \\= 35000 + \frac{20000 [1 – (1+ 0.01)^{-2}]}{0.01} - \frac{10000}{(1 + 0.01)^{2}} \\= $29137.82](https://tex.z-dn.net/?f=Present%20worth%20%3D%20initial%20cost%20%2B%20%5Cfrac%7BA%5B1-%281%2Br%29%5E%7B-n%7D%5D%7D%7Br%7D%20-%20%5Cfrac%7BSalvage%20%5C%20value%7D%7B%281%20%2B%20r%29%5E%7Bn%7D%7D%20%5C%5C%3D%2035000%20%2B%20%5Cfrac%7B20000%20%5B1%20%E2%80%93%20%281%2B%200.01%29%5E%7B-2%7D%5D%7D%7B0.01%7D%20-%20%5Cfrac%7B10000%7D%7B%281%20%2B%200.01%29%5E%7B2%7D%7D%20%5C%5C%3D%20%2429137.82)
Price of share is $12.2. Future dividend is therefore expected to grown by 4.5%. To find the rate of return i.e. K, we will do the following steps:
= 0.36(1.045)/12 = 0.03135+4.5 = 4.53135
Therefore, rate of return is 4.53%.
