Answer:
(1) NO As this maintenaince will be done in order to keep the current value It is an expenditure to avoid decay of the plant assets
(2) Yes it should be capitalizeds as increase the useful life of the assets (thus the depreciation will change as well as the useful years remaining increases
(3) Yes it should be. As increase the utility it will have a higher future positive cashflow in the future.
Explanation:
We are asked under which circumnstances the amont spend in the maintenance or overhaul should increase the plant asset account or be considered expense of the period.
Answer: It should shot down immediately.
Explanation:
If the market price is equal to average cost at the profit-maximizing level of output, then the firm is making zero profits. If the market price that a perfectly competitive firm faces is below average variable cost at the profit-maximizing quantity of output, then the firm should shut down operations immediately.
Answer:
The correct answer is $56,000.
Explanation:
According to the scenario, the given data are as follows:
Average checks per day = $14,000
Days in clearing = 4 days
Interest rate = 0.018% per day
So, we can calculate the company's float by using following formula:
Company's Float = Average checks per day × Days in clearing
By putting the value in the formula, we get
Company's Float = $14,000 × 4
= $56,000
