Depreciation is a way not only to recognize the lost value over time of an asset, but also a way to recognize the expense of the asset over time. To this end, we want to see the value of the asset get smaller, and a piece of the asset on the the income statement ever period.
The depreciation base is 95,000 -5,000 = 90,000, and the depreciation period is 90,000/15,000 = 6 years.
The journal entry every year will be
Dec. 31
Debit: Depreciation expense 15,0000
Credit: Accumulated Depreciation (15,000)
Accumulated depreciation is a *contra-asset* account on the balance sheet that reduces the value of the the depreciable asset.
The real interest rate is the: nominal rate minus the inflation rate
Option B is correct.
What is the meaning of real interest rate?
A real interest rate is an interest rate that has been adjusted to remove the effects of inflation. Once adjusted, it reflects the real cost of funds to a borrower and the real yield to a lender or to an investor. A real interest rate reflects the rate of time preference for current goods over future goods.
What is the real rate of inflation?
But our real-world experience tells us the official inflation rate doesn't reflect the actual cost increases of everything from burritos to healthcare. The grim reality is that real inflation is 7+% per year.
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In the 2,500-year-old text the art of war, chinese general sun tzu argues that "stratergy" and "planning" are key components of strategic planning.
<h3>What is strategic planning?</h3>
Strategic planning is the art of developing specific business strategies, putting them into action, and analyzing the results in relation to a company's overall long-term objectives or desires.
Some key features of strategic planning are-
- It is an idea that concentrates on incorporating different departments within a company (such as finance and accounting, marketing, & human resources) to achieve strategic goals.
- Strategic planning and strategic management are essentially interchangeable terms.
- The idea of strategic planning first gained popularity in the 1950s & 1960s, and it remained popular in the corporate world until the 1980s, when it began to fade.
- However, interest in business strategy was reignited in the 1990s, and strategic planning is still important in today's business.
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Answer:
$1, 154.873
Explanation:
The appropriate formula is
P = PV × <u> r </u>
1 − (1+r)−n
P is the amount that needs to be set aside every year
Where PV is $5000
r is 5% or 0.05
n is five years
P = 5000 x <u> 0.05 </u>
1-(1+0.05)-5
P= 5000 x <u> 0.05 </u>
1-0.783526166
P= 5000 x (0.05/0.216473834)
P = 5000 x 0.2309747976
P= 1, 154.873
