Answer:
The answer is: $18, 750
Explanation:
The double-declining-balance(DDB) method entails computing depreciation of an asset at an accelerated rate. This method is employed when the asset loses value quickly and is expected to generate more revenue at the earlier stages of its useful life. The depreciation is higher at the beginning and lower close to the end of the asset's useful life. The depreciation is computed as follows:
Depreciation = 2 * straight line depreciation percentage * Book value at the beginning of the period
Machine cost: $75, 000
Residual Value: $5, 000
Estimated Life: 4 years/18, 000 hours
Straight line depreciation percentage : 100/4 = 25%
Depreciation Year 1 on DDB = 2 * 25% * $75, 000
= $37, 500
Depreciation Year 2 on DDB = 2 * 25% * ($75, 000 -$37, 500)
= $18, 750
Specific Goals are goals that are specific, and example would be “I want to go to the beach and meditiate” so you would make it specific by saying in detail how you would get there like “sub” goals. Realistic Goals is when you have a goal that can be achieved. I’m not sure what a planning goal is.
Answer:
a. Total Income=$152,500
Marginal Tax rate = 17.3%
Explanation:
Total Income=Taxable Income+Additional Income = $92,000+$60,500=$152,500
Marginal Tax rate = 17.3%
Answer:
Option A. There exist economies of scope between diversified business units
Explanation:
The reason is that diversification is lowering the industry risk of the business the company is in by investing in several other industries. This helps us to lower the risk and have a steady returns in the subsequent years. This means uncertainty related to cash flows is lowered and this has also increased the chances of cash surplus for subsequent years.
Furthermore, if the investments made in diversified business units possesses economies of scope, which means that we are in related diversification because we are manufacturing different but similar goods which are substitutes to each other from large to some extent. This brings economies of scope and would lower the total operating cost of company. Hence the <u>Option A</u> which says that economies of scope does add value to the company is the right option.
Option B is not preferable option as the option of investing in different businesses is choosen in the option A.
Option C is again the same as Option B and the difference is that it uses the word several unrelated businesses instead of comprehensive business portfolio which is the same thing. Hence <u>Option C</u> is also not preferable option here.
<u>Option D</u> is incorrect because when we acquire an organization it is the move of increase in risk portfolio because acquisitions are mostly not a sound investments and not a part of diversification strategy as the company is putting all the eggs in the single basket.
Answer:
$21,000
Explanation:
initial investment $25,000
we need to determine the expected value of every possibility:
- $15,000 loss ⇒ 20% x $10,000 = $2,000
- $29,000 loss ⇒ 15% x $5,000 = $750
- $40,000 gain ⇒ 5% x $65,000 = $3,250
- break even ⇒ 60% x $25,000 = $15,000
total expected value = $21,000
