Answer:
Annual depreciation= $32,500
Explanation:
Giving the following information:
Purchase price= $70,000
Salvage value= $5,000
Useful life= 4 years
<u>To calculate the annual depreciation under the double-declining-balance method, we need to use the following formula:</u>
<u></u>
Annual depreciation= 2*[(book value)/estimated life (years)]
<u>2022:</u>
Annual depreciation= 2*[(70,000 - 5,000) / 4]
Annual depreciation= $32,500
<span>Your real income value will increase. The value of your money has now become higher, since deflation is a decrease in the overall money supply. Any income you do have, if it stays the same, will be able to buy more in products than it previously was able to.</span>
Answer:
LIFO
Explanation:
It will be the one that give higher Cost of goods sold. We also know that:
Cost of goods sold = Opening Inventory + Inventory Purchases - Closing Inventory
So this means the lower the closing inventory the higher the cost of goods sold and in time of price increases it will be more appropriate to use LIFO method which will reduce the Closing Inventory and this will increase the cost of goods sold and thus decrease in profit. This reduced profit means that the tax expense will also be lower in value.
Similarly the second attractive option will be the Weighted Average and the least attractive option would be FIFO costing method.
Answer;
$ 70.07
Explanation:
The price of the stock when the dividends level off at a constant growth rate, we then find the PV of the future stock price, including the PV of all dividends during the super normal growth period. The stock start it constant growth in Year 4, so that we can be able to find the price of the stock in Year 3, which is the year before the constant dividend growth begins as:
P3= D3(1 + g) / (R− g) = D0(1 + g1)3(1 + g2) / (R− g)
P3= $3.40(1.24)3(1.06) / (.14 − .06)
P3= $85.89
Therefore the price of the stock today is the PV of the first three dividends, we then add it with the PV of the Year 3 stock price.
Hence the price of the stock today will be:
P0= $3.40(1.24) / 1.14 + $3.40(1.24)2/ 1.142+ $3.40(1.24)3/ 1.143+ $85.89 / 1.143
P0= $70.07
The current shape price is $70.07
