Answer:
$18,750
Explanation:
Given:
Adjusted amount of loss = $90,000
Fair market value = $75,000
Insurance amount received = 95% of fair Market value
Adjusted gross income = $40,000
<u>Computation of business loss: </u>
<u>Particular Amount </u>
Adjusted amount of loss $90,000
Less: Insurance amount received $71,250
<u>($75,000 × 95%) </u>
<u>Business loss $18,750
</u>
Therefore, the current year deduction is $18,750
Your answer would be, If the Marginal Product of labor increases/rises, The Marginal Cost of Output FALLS.
If the Marginal Product of labor Falls, The Marginal Cost of Output RISES.
Hope that helps!!!
Answer:
$3,716.37
Explanation:
Initial investment $70,000 (cost of the equipment)
Depreciation expense per year = (cost- salvage value) / useful life = ($70,000 - $0) / 5 years = $14,000
net cash flows per year (the same for every year):
[(revenues - operating expenses - depreciation expense) x (1 - tax rate)] + depreciation expense = [($30,000 - $11,000 - $14,000) x (1 - 30%)] + $14,000 = $3,500 + $14,000 = $17,500
year NCF
0 -$70,000
1 $17,500
2 $17,500
3 $17,500
4 $17,500
5 $17,500
6% discount rate
using a financial calculator, the NPV = -$70,000 + $73,716.37 = $3,716.37
$73,716.37 is the present value of the 5 future cash flows
Answer:
1. How is a bond like an IOU?
A bond is an IOU because it is actually a type of IOU. A bond is in essence a security in which the bond issuer promises to pay the bondholder the full value of the bond at maturity, plus interest payments (coupons) that can be paid either periodically, or at maturity as well.
2. Why is an investment grade bond is considered a “safe” investment?
Investment grade bonds are those bonds that have a rating that is considered "safe". This rating is provided by agencies such as Standard and Poors or Moody's. It is the credibility behind these agencies that makes a bond with that type of rating a safe investment.
3. How can an investor make money by buying a bond?
The investor makes money because he or she obtains the full value of the bond at maturity plus interest (coupon payments).
Bondholders also have priority over stockholders in case of bankruptcy, so a bond is in many cases a safer investment than a stock.
4. Would you recommend your Stock Market Game team include a bond in your portfolio? Why, why not?
Yes, bonds should be included because they are one of the two main types of securities, the other being stocks precisely. Companies often have to take the decision to finance their operations either with bonds or stocks, or a combination of the two, so if the game includes bonds, it also becomes more realistic.
Answer and Explanation:
a. The solution of return on assets under each cost flow is described below:-
Return on assets under FIFO = Net income ÷ Average total assets
= $244,087 ÷ $1,550,550
= 15.7%
Return on assets under LIFO = Net income ÷ Average total assets
= ($244,087 - $44,110) ÷ ($1,550,550 - $40,630)
= $199,977 ÷ $1,509,920
= 13.2%
b. The computation of return on assets under each cost flow is shown below:-
Return on assets under FIFO = Net income ÷ Average total assets
= $288,567 ÷ $1,880,970
= 15.3%
Return on assets under LIFO = Net income ÷ Average total assets
= ($288,567 + $22,660) ÷ ($1,880,970 - $45,690)
= $311,227 ÷ $1,835,280
= 17%
