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Anna35 [415]
3 years ago
9

* Round all answers to the nearest dollar Your company buys a tower crane for $900,000 on January 1, 2019. It has a 20 year life

, it's expected salvage value is $20,000, and total estimated usage is 20,000 hours. Assuming you use straight line depreciation how much is the depreciable amount? $
Business
1 answer:
evablogger [386]3 years ago
4 0

Answer:

Depreciable amount= $880,000

Explanation:

Giving the following information:

Your company buys a tower crane for $900,000 on January 1, 2019. It has a 20-year life, it's expected salvage value is $20,000.

To calculate the annual depreciation, we need to use the following formula:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (900,000 - 20,000)/20= $44,000

Depreciable amount= original cost - salvage value= 880,000

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Suppose that the risk-free rate is 5% and that the market risk premium is 7%. What is the required return on (1) the market, (2)
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1.

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For a stock whose beta is 1.0, the required rate of return would be same as that for market. So, the required rate of return for a stock with a beta of 1.0 is,

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3 years ago
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