Answer:
Annual depreciation= $4,000
Explanation:
Giving the following information:
The cost of the machine was $29,000. Its estimated residual value was $9,000 at the end of estimated 5-year life.
<u>To calculate the depreciation expense, we need to use the following formula:</u>
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (29,000 - 9,000)/5
Annual depreciation= $4,000
Answer:
The company's cost of preferred stock is 5.1%
Explanation:
In order to find the cost of the preferred stock we will need to divide the dividend the company pays on it by the net amount that the company is receiving for selling it.
In order to find the dividend we will multiply 9% by the par value of 20
Dividend = 0.09*20=1.8
Now we need to find the net amount the company receives for selling the preferred stock.
The company sells the stock for $40 but also has a issuing cost of $5, so in order to find the net amount we will subtract the cost from the price.
40-5= 35
35 is the net amount the company receives.
Now we will divide the the dividend 1.8 by the net amount 35
1.8/35=0.051
=5.1%
The company's cost of preferred stock is 5.1%
Answer:
Nominal interest rate (n) = 10% = 0.10
Inflation rate (i) = -2% = -0.02
Real interest rate (r) = ?
Application of Fisher's Equation
(I + n) = (1 + r)(1 + i)
(1 + 0.10) = (1 + r)(1 + -0.02)
1.10 = (1 + r)(0.98)
<u>1.10</u> = 1 + r
0.98
1.1224 = 1 + r
1.1224 - 1 = r
r = 0.1224 = 12.24%
Jimmer's real income will change by 12.24% next year.
Explanation:
In the determination of the rate of change in real income, there is need to apply Fisher's equation. The nominal rate and inflation rate have been given, thus, we will make the real rate the subject of the formula.
Based on the details given, the following are true:
- a. Value of bond = $806.09
- b. Your friend should invest in the bond with $1,000 face value
<h3>Value of Bonds </h3>
First find coupon:
= 10% x 1,000
= $100
Bond A
<em>= (Coupon x Present value interest factor of annuity, 13%, 15 years) + Face value of bond / ( 1 + 13%)¹⁵</em>
= ( 100 x 6.462) + (1,000 / 1.13¹⁵)
= $806.09
Bond B
= Face value - Current value
= 1,000 - 180
= $820
In conclusion, Bond B is overvalued so your friend should pick Bond A.
Find out more on Bond price calculation at brainly.com/question/25365327.
Answer:
Given:
Allowance for Doubtful Accounts is a credit of $760
Written off accounts = $120
Accounts totaling = $740
The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts will be computed as:
<em>Allowance for Doubtful Accounts - Accounts totaling + Written off accounts</em>
<em>⇒ $760 - $740 + $120</em>
<em>⇒ $140</em>
<u><em /></u>
<u><em>therefore, the correct option is (c).</em></u>
