Answer:
Straight-line = $3,900
Double Declining Method = $7,800
Activity Based = $3,600
Explanation:
1. Straight-line.
Depreciation Expense = (Cost of Asset - Salvage Value) / Useful Life
= $43,000 - $4,000 / 10
= $3,900
2. Double Declining Method
Deprectiation Expense = (2 x (Cost of Asset - Salvage Value)) / Useful Life
= 2 x ($43,000 - $4,000) / 10
= (2 x $39,000 ) / 10
= $78,000 / 10
= $7,800
3. Activity Based
Depreciation Expense = (Cost of Asset - Salvage Value) x Activity Peformed / Estimated Lifetime Acitity
= ($43,000 - $4,000) x 1,200 hours / 13,000 hours
= $39,000 x 1,200 / 13,000
= $3,600
C) the people that purchase goods and services
Answer:
Expected return = 21.9
%
Explanation:
<em>The capital asset pricing model is a risk-based model. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta</em>.
Under CAPM, Ke= Rf + β(Rm-Rf)
Rf-risk-free rate (long-term i.e 10 year treasury bill rate), β= Beta, Rm= Return on market., Ke- Return on equity (cost of equity)
This model can be used to work out the cost of equity as follows:
Ke= Rf + β (Rm-Rf)
Rf- 5%, β= 1.3, Rm- 18, E(r)- ?
Ke = 5% + 1.3×(18-5)%=21.9
%
Ke = 21.9
%
Expected return = 21.9
%
Answer:
it is one no ans the government
