Answer:
Margin of safety is a principle of investing in which an investor only purchases securities when their market price is significantly below their intrinsic value. ... Alternatively, in accounting, the margin of safety, or safety margin, refers to the difference between actual sales and break-even sales
Answer:
a-The present value of revenue in the first year is $61,085.92.
b-The total time it would take to pay for its price is 2.44 years of 29.33 months.
Explanation:
a-
Let the function of the revenue earned is given as
![S(t)=\left \{ {{66000t+38000} {\ \ 0The present value is given as [tex]PV=\int\limits^a_b {S(t)e^{-rt}} \, dt](https://tex.z-dn.net/?f=S%28t%29%3D%5Cleft%20%5C%7B%20%7B%7B66000t%2B38000%7D%20%7B%5C%20%5C%200%3C%2Fp%3E%3Cp%3EThe%20present%20value%20is%20given%20as%20%3C%2Fp%3E%3Cp%3E%5Btex%5DPV%3D%5Cint%5Climits%5Ea_b%20%7BS%28t%29e%5E%7B-rt%7D%7D%20%5C%2C%20dt)
Here
- a and b are the limits of integral which are 0 and 1 respectively
- r is the rate of interest which is 5% or 0.05
- S(t) is the function of value which is
![S(t)=\left \{ {{66000t+38000} {\ \ 0So the equation becomes[tex]PV=\int\limits^0_1 {S(t)e^{-0.05t}} \, dt\\PV=\int\limits^{0.5}_0 {(66000t+38000)e^{-0.05t}} \, dt+\int\limits^{1}_{0.5}{(71000)e^{-0.05t}} \, dt\\PV=\int\limits^{0.5}_0 {(66000t)e^{-0.05t}} \, dt+\int\limits^{0.5}_0 {(38000)e^{-0.05t}} \, dt+\int\limits^{1}_{0.5}{(71000)e^{-0.05t}} \, dt\\PV=8113.7805+18764.4669+34207.6751\\PV=61085.9225](https://tex.z-dn.net/?f=S%28t%29%3D%5Cleft%20%5C%7B%20%7B%7B66000t%2B38000%7D%20%7B%5C%20%5C%200%3C%2Fli%3E%3C%2Ful%3E%3Cp%3ESo%20the%20equation%20becomes%3C%2Fp%3E%3Cp%3E%5Btex%5DPV%3D%5Cint%5Climits%5E0_1%20%7BS%28t%29e%5E%7B-0.05t%7D%7D%20%5C%2C%20dt%5C%5CPV%3D%5Cint%5Climits%5E%7B0.5%7D_0%20%7B%2866000t%2B38000%29e%5E%7B-0.05t%7D%7D%20%5C%2C%20dt%2B%5Cint%5Climits%5E%7B1%7D_%7B0.5%7D%7B%2871000%29e%5E%7B-0.05t%7D%7D%20%5C%2C%20dt%5C%5CPV%3D%5Cint%5Climits%5E%7B0.5%7D_0%20%7B%2866000t%29e%5E%7B-0.05t%7D%7D%20%5C%2C%20dt%2B%5Cint%5Climits%5E%7B0.5%7D_0%20%7B%2838000%29e%5E%7B-0.05t%7D%7D%20%5C%2C%20dt%2B%5Cint%5Climits%5E%7B1%7D_%7B0.5%7D%7B%2871000%29e%5E%7B-0.05t%7D%7D%20%5C%2C%20dt%5C%5CPV%3D8113.7805%2B18764.4669%2B34207.6751%5C%5CPV%3D61085.9225)
So the present value of revenue in the first year is $61,085.92.
b-
The time in which the machine pays for itself is given as
The present value is set equal to the value of machine which is given as
$160,000 so the equation becomes:
So the total time it would take to pay for its price is 2.44 years of 29.33 months.
Answer:
D) Property's fair value at the date of the investment.
Explanation:
When new business is formed from closing the old one, all assets are recorded at fair value.
Thus, all the assets other than cash shall be recorded at their respective fair values in the new business which is a partnership, as the cost or historical value will not display their proportional contributions properly.
Therefore, correct statement is
D) Property's fair value at the date of the investment.
Answer:
Return on equity.
Explanation:
Financial statements can be defined as a document used for the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors. These includes balance sheet, statement of retained earnings and income statement.
The financial ratio that measures the accounting profit per dollar of book equity is referred to as the return on equity. It is calculated by dividing the net income with the shareholder's equity at a specific period of time
