Isaiah is in his 50s and currently does not have a retirement fund. However, he recently read a few articles about the insuffici
1 answer:
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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.
Answer:
Present value of the offer = $739,018.03
Explanation:
The cash flows described in the question from end of year 1 to end of year 20 represent a growing annuity for 20 years. The present value of a growing annuity is calculated as follows:
PV=
where P = the annuity payment in the first period
i = interest rate per period that would be compounded for each period
g = growth rate
n = number of payment periods
P in the 1st year = the base salary of $59,000 + the 10% bonus of $5,900 = $64,900; g is 3.9% ;i=0.1 and n = 20
Present value of the offer = 15,000 received immediately + PV of the growing annuity
= =739,018.03