Answer:
$4,800 each
Explanation:
The computation of the depreciation expense for the first two year under the straight-line method is shown below:
= (Original cost - residual value) ÷ (useful life)
= ($120,000 - $0) ÷ (25 years)
= ($120,000) ÷ (25 years)
= $4,800
In this method, the depreciation is same for all the remaining useful life
Hence, the depreciation of $4,800 is to be charged separately for each year
Answer:
Coupon= $30 per period.
20 period for semi annual coupon payment.
28.148% discount rate
Explanation:
1.) Coupon rate * face value of bond = coupon
semi annual rate =6%/2=3%
Coupon= 1000 *3%= $30 per period.
2.) t= number of periods = years of maturity * coupon payment semi-annual
t= 10 * 2 = 20 periods.
3. Discount rate formula =C+[(F-P)/t] / (F+P/2)
where C=coupon payment annual
F= face value of security
P=price of security= 1000 *8%=80
t= years of maturity.
so we have⇒ 60+[(1000-80)/10]/(1000+80)/2
=152/540
=28.148%
B. Economists have different values and scientific judgment. Economists exercise both subjective and objective judgments about data that they collect and observations that they make. These values and judgments differ among economists which can affect their advice or opinions, sometimes leading to conflicting advice.
To calculate:
1) Net income (loss) for 2010.
2) Operating cash flow
Solution: 1)
Sales = $850000
Less: Cost of goods sold = $610000
Gross profit = $240000
Less: Administrative and selling expenses = $110000
Earning before Interest, Tax and Depreciation = $130000
Less: Depreciation = $140000
Earning before Interest and Tax (EBIT) = ($10000)
Less: Interest expense = $85000
Earning before tax (EBT) = ($95000)
Less: Tax = $0 (as company is having negative EBT or loss hence no tax)
Net loss = $95000
2) Operating cash flow
EBIT + Depreciation - Tax
Wherein, EBIT = Earning before Interest and Tax
($10000) + 140000 - 0 = $130000
Suppose a worker is offered a wage of $8 per hour, plus a fixed payment of $100 per day, and she can use 24 hours per day. The Market rate of substituion between leisure & income is $8 per day.
Because the budget line FE describes the opportunities available to a worker who has $100 of nonlabor income per week, faces a market wage rate of $10 per hour, and has 110 hours of nonsleeping time to allocate between work and leisure activities This means that the person will choose the level of goods and leisure that lead to the highest possible level of the utility index given the limitations imposed by the budget constraint.
Leisure is the time when you are free from work or other duties and can relax.
Limitations the act of controlling the size or extent of something the act of limiting something.
Budget is a spending plan based on income and expenses.
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