The 2017 financial statements of Meadowlark Corporation report that the company paid dividends of $21,825,000 to its preferred s
2 answers:
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Answer:
2.36 years
Explanation:
Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows.
To derive cash flows from net income, depreciation expenses should be added to net income.
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life) = 2 / 5 = 0.4
Deprecation expense in year 1 = 0.4 x $202,000 = $80,800
Book value in year 2 = $202,000 - $80,800 = $121,200
Deprecation expense in year 2 = 0.4 x $121,200 = $48,480
Book value in year 3 = $121,200 - $48,480 = $72,720
Deprecation expense in year 3 = 0.4 x $72,720 = $29,088
Book value in year 4 = $72,720 - $29,088 = $43,632
Deprecation expense in year 4 = $43,632 x 0.4 = $17,452.80
Book value in year 5 = $43,632 x 0.4 - $17,452.80 = $26,179.20
Deprecation expense in year 5 = $26,179.20 x 0.4 = $10,471.68
Cash flow in year 1 = $18,000 + $80,800 = $98,800
Cash flow in year 2 = $25,000 + $48,480 = $73,480
Cash flow in year 3 = $53,000 + $29,088 = $82,088
Cash flow in year 4 = $58,000 + $17,452.80 = $75,452.80
Cash flow in year 5 = $108,000 + $10,471.68 = $118,471.68
Please check the attached image for how the payback period was calculated
Answer:
At Price =
Quantity demanded =
At Price =
Quantity Demanded =
Now,
Above formula if used will give the correct answer related to Price Elasticity of Demand.
Another variant of above formula is also being used on prominent basis.
Utilization of any of the above Formula will give the ideal outcome in estimating Price elasticity of demand.