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3 years ago

Which of the following is true about depreciation?

Business

1 answer:

Vladimir79 [104]3 years ago

5 0

Answer:

a) Depreciation expense is a special kind of prepaid expense.

Explanation:

Depreciation expense is treated the same way as amortized costs, which are actually a type of "prepaid" expenses. You depreciate an asset over time in a similar manner as you accrue prepaid expenses. Accumulated depreciation and carrying value are not meant to reflect an asset's market value since a can company can choose accelerated depreciation, bonus depreciation or even expensing the asset. Accumulated depreciation is a contra asset account that reduces the asset's carrying value.

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Alpha Industries is considering a project with an initial cost of $8 million. The project will produce cash inflows of $1.49 mil

IrinaVladis [17]

Answer:

NPV = 1,003,046

Explanation:

NPV = Present value of income - investment

investment 8,000,000

1,490,000 income per year during 8 years at rate x

We need to calculate the WACC so we can know the rate

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

equity-ratio = 0.40

$\frac{E}{E+D} =0.40$

debt-equity ratio = 0.6

$\frac{D}{E+D} =0.60$

$K_e= 11.27\\0.1127 \times0.40 = 0.04508$

$K_d = 5.61 \\0.0561\times (1-.35)\times 0.6 = 0.021879$

WACC 6.69590%

Now that we achieve the rate we solve for the present value of the cash flow

$C * \frac{1-(1+r)^{-time} }{rate} = PV\\$

$1.49* \frac{1-(1.06959)^{-8} }{0.06959} = PV\\$

PV 9,003,046

And finally get the answer

NPV 9,003,046 - 8,000,000 = 1,003,046

3 0

3 years ago

At the beginning of the tax year, Barnaby's basis in the BBB Partnership was $50,000, including his $5,000 share of partnership

drek231 [11]

Answer:

$62,000

Explanation:

Calculation to Determine Barnaby's basis at the end of the tax year

Using this formula

Ending tax year Barnaby's basis in the partnership=[BBB Partnership basis+( Share of debt-Share of partnership debt)+ Share of Partnership's income +Share of partnership's nontaxable income-Cash distributions]

Let plug in the formula

Ending tax year Barnaby's basis in the partnership =$50,000 + ($8,000-$5,000) + $20,000 + $1,000 - $12,000

Ending tax year Barnaby's basis in the partnership =$50,000 + $3,000 + $20,000 + $1,000 - $12,000

Ending tax year Barnaby's basis in the partnership = =$62,000

Therefore Barnaby's basis at the end of the tax year will be $62,000

5 0

3 years ago

A marketing company wants to estimate the proportion of consumers in a certain region of the country who would react favorably t

Sindrei [870]

The closest to the minimum number of consumers needed to obtain the estimate with the desired precision is (b) 271

Explanation:

When the prior estimate of population proportion is not given , then the formula to find the sample size is given by :-

$n=0.25(\frac{z^{*} }{E} )^{2}$

where E = Margin of error.

z* = Critical z-value.

As per given , we have

E = 5%=0.05

Confidence level = 90%

The critical value of z at 90% is 1.645 (By z-table)

Put all values in the formula , we get

n=0.25(1.645/0.05)²

n=0.25(32.9)²

n=270.6025≈271

Thus, the minimum sample size needed = 271

Hence , the correct answer is 271 .

8 0

3 years ago

The Herfindahl index equals ______. Multiple choice question. total market shares of the largest four firms in an industry sum o

Lelu [443]

The Herfindahl index equals sum of the squared percentage market shares of all firms in an industry.

<h3>What is Herfindahl index?</h3>

The Herfindahl Index can be regarded as the common measure of market concentration which is used in measuring the market in term of the competition.

In calculating this Herfindahl Index, we can determine the pre- and post-M&A and equals sum of the squared percentage market shares .

Learn more about Herfindahl index at; brainly.com/question/15701307

#SPJ1

8 0

1 year ago

Etxuck327 Inc. sells a particular textbook for $39. Variable expenses are $28 per book. At the current volume of 49,000 books so

Westkost [7]

Answer:

539,000.00

Explanation:

As per the contribution margin analysis concept, the break-even point is obtained by dividing fixed cost by contribution margin per unit.

For Etuck327,

The selling price is $39

Variable expense is $28

Break-even in units is 49,000 books.

Contribution margin per unit = selling price - variable costs

=$39- $28

=$11

if Break-even = fixed cost/ contribution margin per unit, then

49,000= fixed cost / 11

fixed costs = 11 x 49000

Fixed costs = 539,000.00

5 0

3 years ago