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3 years ago

Which of the following are true?

Business

1 answer:

laiz [17]3 years ago

3 0

Answer:

c. Payback is the amount of time to recover the initial investment. No discounting occurs and all cash flows after the payback period are not accounted for. The rule is intuitive and used by small business owners

Explanation:

Net present value is the present value of after tax cash flows from an investment less the amount invested. The NPV does account for all cash flows as well as time value of money.

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested . The IRR does account for all cash flows.

The discounted payback period discounts cash flows

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3 years ago

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4 years ago

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3 years ago

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3 years ago

On October 1, 2022, Ivanhoe Company places a new asset into service. The cost of the asset is $87500 with an estimated 5-year li

Dimas [21]

Answer:

$3150

Explanation:

Given:

Cost of the asset purchased = $87500 (on 1st October. 2022)

Salvage value at the end of its useful life = $24500

Useful life estimated = 5 years

Question asked:

What is the depreciation expense for 2022 if Ivanhoe Company uses the straight-line method of depreciation?

Solution:

As we know:

$Straight-Line\ Depreciation\ Expense=\frac{Cost\ - Salvage\ Value}{Useful\ Life\ of\ the\ Asset}$

$=\frac{87500-24500}{5} =\frac{63000}{5} =12600$

Depreciation expenses per year = $12600

But we have to find depreciation expenses for 2022 for:-

From 1st October, 2022 to 31st December, 2022 = 3 months.

Straight-Line Depreciation Expense for Partial Year = 

 $D\times\frac{N}{12} \\\\ D=Depreciation\ expense\ for\ a\ complete\ year.\\N= Number\ of\ months\ during\ which\ the\ fixed\ asset\ was\ available\ for\ use$

Depreciation Expense for 3 months = $12600\times\frac{3}{12} =\frac{37800}{12} =3150$

Therefore, the depreciation expense for 2022 if Ivanhoe Company uses the straight-line method of depreciation is $3150.

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3 years ago