Straight line depreciation (D) is computed as follows:
D= (purchase cost of an asset- its expected salvage value)/ the number of years of its expected useful life.
In the case of the old machine sold by Nicklaus Company, depreciation (D) in dollars is:
D = (160,000-0)/10
D= 160,000/10
D= 16,000 per year
Since the machine was bought on June 30, 2003, and was sold on January 1, 2009, its total depreciation value (TD) for the 6 and half years that it was used is:
TD = 16,000 x 6.5
TD= 104,000
Cost of the asset on time of sale, therefore, is 160,000-104,000=56,000
<span>Since the company sold it at only $52,000, recorded loss will be $4,000 (56,000-52,000). </span>
<span>Their marketing approach is listening to customer feedback. Basing some marketing and some ways they produce their food on customer feedback can be both beneficial and work out well as long as it's cost effective and doesn't hinder sales much.</span>
Answer: For 2014, Korte would report comprehensive income of $341,000.
Explanation:
Korte Company
Comprehensive income statement for 2014 (extract)
Sales revenue $1,500,000
Cost of goods sold (1,050,000)
Gross profit 450,000
Operating expenses (165,000)
<em>Other income:</em>
Unrealised gain on AFS securities 50,000
Dividends received 6,000
Comprehensive income $341,000
Answer:
The firm set as the required rate of return for the project is 14.732%
Explanation:
For computing the required rate of return, the following formula should be used which is shown below:
= Risk free rate of return + (Beta × market risk premium) + adjustment
where,
Risk free rate of return is 4.1%
Beta is 1.19
Market risk premium is 7.8%
Adjustment is 1.35%
Now put these values to the above formula
So, the value wold be equal to
= 4.1% + (1.19 × 7.8%)+ 1.35%
= 4.1% + 9.28% + 1.35%
= 14.732%
The standard deviation is irrelevant. Therefore, it is not considered in the computation part.
Hence, the firm set as the required rate of return for the project is 14.732%
The total amount of taxes that the company will pay will be calculated as under -
Total taxes paid = (Taxes on income) + (Taxes on dividends)
Total taxes paid = ($ 9.50 X 39%) + ($ 4 X 10%)
Total taxes paid = $ 3.705 + $ 0.4 = $ 4.105 or $ 4.11
