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WITCHER [35]
3 years ago
7

1. [4 points] The SoShal DistanSing Company purchased a new food delivery truck on April 1st of this year. The truck cost $35,00

0 to purchase and another 26,000 to add food safe racking and refrigeration units. The truck has a useful life of 9 years. SoShal estimates that the salvage value of the truck to be $8750 at the end of its useful life. a. [1 point] Calculate the depreciation schedule (i.e. depreciation

Business
1 answer:
VashaNatasha [74]3 years ago
6 0

Answer:

Depreciation each year is $5,805.56 and Schedule for the depreciation attached with this answer please find it.

Explanation:

Depreciation is a expense which is charged against an asset over its useful life due to wear and tear of that asset. This expense is recorded as and Expense in Income statement and accumulated in an contra asset account asset account until the disposal of the asset.

Total Cost = Truck Purchase price and Additions = $35,000 + $26,000 = $61,000

Salvage value = $8,750

Useful life = 9 years

Depreciation = ($61,000 - $8,750) / 9 = $5805.56

We will use the straight line depreciation method.

Straight line method depreciates the asset on its useful life after deducting salvage value from the cost of the asset.

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Why do we subtract depreciation in the calculation of EBIAT if we are going to add it back as the next step of the Free Cash Flo
vladimir1956 [14]

Answer: Depreciation is tax deductible

Explanation:

Depreciation on assets is recognized by tax authorities as an expense that a business actually incurs so when the income statement is calculated, depreciation needs to be removed as the expense that it is so that taxes can be calculated on the profit.

Depreciation however, does not take actual cash from the company i.e the company does not actually pay anyone cash for depreciation like most other expenses. It needs therefore to be added back to the Free Cash Flow because the FCF deals with how much actual cash the company has which is something that Depreciation being a non-cash expense did not reduce.

3 0
3 years ago
Sustainability programs often find their success beyond company boundaries, thus ______ systems and _____ metrics cannot capture
AlladinOne [14]

Answer:

internal; process

Explanation:

Sustainability programs are usually used by organization for the growth of the organization, it may be interms of risk management and others however, it has to be a continuous process for it to be achieved.

It should be noted that Sustainability programs often find their success beyond company boundaries, thus internal systems and process metrics cannot capture all of the relevant numbers.

3 0
3 years ago
Keith enjoys cutting hair and he just graduated from a cosmetology program. He has opened up his own shop, but it has not grown
marysya [2.9K]

Answer:

Franchises.

Explanation:

A franchise is formed when a third party is given the right to market products using the brand name of a parent company. There is usually an agreement between the parent company and the third party on profit sharing from the franchise.

In this scenario Keith wants to try a brand recognition of a national chain, but he wants to stay in his local area and be the owner of the shop.

The best option is to form a franchise where he can use the national brand to grow his business locally.

3 0
3 years ago
For high school graduation, Ryan’s family is giving him a choice between two presents that are both worth $900. He can choose ei
yulyashka [42]

Answer: The Mexican trip with his best friends

Explanation:

Ryan cannot choose both options and thus has to make a decision of which option to take. Therefore he automatically sacrifices the other option. This type of decision is relevant and is known as a relevant cost. Relevant costs are costs that differ between alternatives, and thus influence the decision that you will make.

Opportunity cost is a type of relevant cost. This is the option that is given up / sacrificed when one option (laptop) is chosen over another (Mexican trip). In this case the opportunity cost is the Mexican trip when the laptop is chosen.

3 0
3 years ago
Saint Nick Enterprises has 17,500 shares of common stock outstanding at a price of $69 per share. The company has two bond issue
mihalych1998 [28]

Answer:

total weight of debt = 0.343 or 34.3%

Explanation:

stock's market value = 17,500 x $69 = $1,207,500

bond₁'s market value = $250,000 x 101.5% = $256,750

bond₂'s market value = $350,000 x 106.5% = $372,750

total market value of the firm = $1,837,000

weighted capital structure:

                                       market value            weight

stocks                             $1,207,500               0.657

bond₁                              $256,750                  0.140

bond₂                              $372,750                  0.203

total                                $1,837,000                 1

total weight of debt = 0.343 or 34.3%

8 0
3 years ago
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