Answer:
$9.57 per stock
Explanation:
using the dividend discount model to find the stock's current price (P₀):
P₀ = Div₁ / (Re - g)
- Div₁ = $0.70 x 1.025 = $0.7175
- Re = 10%
- g = 2.5%
P₀ = $0.7175/ (10% - 2.5%) = $0.7175/ 7.5% = $9.5667 ≈ $9.57 per stock
The formula for annual depreciation by means of the units-of-production method is:
(depreciable cost / estimated output) x the actual yearly output
Under the units of production method, the quantity of depreciation indicted to expense differs in direct proportion to the amount of asset usage. Therefore, a business may charge more depreciation in times when there is more asset consumption and less depreciation in times when there is a smaller amount of usage. It is the most precise method for indicting depreciation as this method relate thoroughly to the wear and tear on assets. Though, it also needs that someone should track asset usage which means that its use is commonly restricted to more luxurious assets. It needs estimation of the total usage over the life of the asset in order to come up with the amount of depreciation to identify in separate accounting period.
Answer:
b. Buy new car because EUAC of challenger is $4,904 and EUAC defender is $5,111.
Explanation:
If the used car is kept its current worth is $7,500. The maintenance for next two years will be $1,800 and $2,000. The total maintenance expense for next two years will be 3,800. The net book value for car after two years will be $7,500 - 3,800 = 3,700.
The car can then be sold for $3,000. There will be net loss of $700 value of the car. The new car cost $22,000 but all maintenance cost is saved. The best option then is to buy new car.
Answer:
The correct answer is: contribution margin income statement.
Explanation:
The contribution margin income statement organizes costs by behavior and not by function thus it is not used for financial reporting. The variable expenses are deducted from sales to be recorded at a contribution margin. Fixed expenses are subtracted from the net profit obtained at the end of the accounting period.
