Answer:
ACME Drilling should record impairment loss of $6.9 million
Explanation:
According to GAAP, when the fair value of an asset is below the net carrying amount of that asset ( Asset's historical cost - Asset's accumulated depreciation or the net book value of the asset), the Company should record it as asset impairment loss.
In ACME's case, the net book value is $18.6 million while the estimated fair value is only $11.7 million meaning that the platform is actually worth less than it is recorded on ACME's book. Thus, an impairment loss of $6.9 million should be recorded ( $18.6 million - $11.7 million) to realize the fair value of the oil-drilling platform.
The sum of projected sum of future cash flows in this case is not suitable to be used to determine the oil-drilling platform because it has not been discounted to the present value amount, and also, it is not appropriate under GAAP.
Answer:
Explanation:
7
+
5
−
9
+
2
−
1
2
7y+5x-9+2y-12x
7y+5x−9+2y−12x
Simplify
1
Combine like terms
7
+
5
−
9
+
2
−
1
2
{\color{#c92786}{7y}}+5x-9+{\color{#c92786}{2y}}-12x
7y+5x−9+2y−12x
9
+
5
−
9
−
1
2
{\color{#c92786}{9y}}+5x-9-12x
9y+5x−9−12x
2
Combine like terms
3
Rearrange terms
Solution
−
7
+
9
−
9
Answer:
allows accurate predictions.
Explanation:
The law of large numbers states that the larger the amount of policy holders, the probability distribution of the number of claims (losses for the insurance company) will be shaped like a normal distribution. This allows the companies to make more accurate predictions about the future number of claims.
In statistics, the law of large numbers states that as the sample size increases, the mean will be much closer to the real mean of the total population.
Answer:
The advantages of using license strategy are given below.
- Well suited to acheive scale of economies.
- Its helps in charging lower price than rivals.
- Helps to achieve first-mover advantages quickly and easily.
- Less risky strategy as you do not need to invest heavily in capital in the form of machinery, land , building and e.t.c
- Easy do terminate operations as dis-investment is easy in this case.
Answer:
The pric eof the stock today us $77.12
Explanation:
The two stage dividend growth model of DDM will be used to calculate the price of the stock today. The formula for two stage growth model is:
Price today = D1 / (1+r) + D2 / (1+r)^2 + ... + [(Dn / r - g) / (1+r)^n]
Price today = 3 / (1+0.06) + + 3 * (1+0.05) / (1+0.06)^2 + [(3 * (1+0.05) * (1+0.02) / 0.06 - 0.02) / (1+0.06)^2]
Price today = $77.12
