IL PROBLEM SOLVING 1. An equipment costing P250. 000 has an estimated life of 15 years with a bok value of P30. 000 at the end of the period. Compute the depreciation charge and its book value after 10 years using declining balance nethod
Q: a. What is Ambeon's weighted average cost of capital? b. If Ambeon's stock price were to rise such t...
A: Weighted average cost of capital capital can be defined as average rate of return from all the sourc...
Q: Assume you sell short 100 shares of GE at P69 in July. You buy a September P70 call for P3.50 to pro...
A: The gain or loss is call is calculated as sum of loss on short position and the gain in call option ...
Q: 6. A 4-month European call option on a dividend paying stock is selling for C = $4. So $54, K = $50....
A: Time period is 4 months Expected dividend in 2 months is $0.90 Call price is $4 Spot price is $54 St...
Q: Is estate tax a type of debt? What happens if a person doesn't pay estate tax?
A: The estate tax is a tax imposed after a person's death on the transfer of property and other assets....
Q: Wally and Paolo are bestfriends. Wally desires Paolo to receive 200000 in twelve years. What should ...
A: We need to use future value formula to calculate the amount to be invested today. PV =FV(1+r)n wher...
Q: arett & Sons' common stock currently trades at $24.00 a share. It is expected to pay an annual divid...
A: Answer - Given, Current Price Per Share - $24 Dividend at end of Year - $2.50 Constant growth r...
Q: A city is evaluating the installation of a garbage incinerator on the outskirts of town. The cost of...
A: Note: $25,000 environmental study cost, which is irrelevant for decision making. So, this cost shoul...
Q: The Hub Store at a university in eastern Canada is considering purchasing a self-serve checkout mach...
A: Saving on machine = $43,500 Cost of machine = $410,000 Time period = 10 years Operating cost per yea...
Q: Q 18-21: Let the current spot rate be 1.21 Sf/$. Let the exercise price be 1.20 $/€. Let the volatil...
A: Thanks for the Question: Bartleby's Guideline: “Since you have posted a question with multiple sub-p...
Q: Assume that the real risk free rate is 3% and the average annual expected inflation rate is 5%. The ...
A: Bond is a debt-backed security which is used by investors to reduce risk and increase stable income ...
Q: INCOME STATEMENT Little Books Inc. recently reported $3 million of net income. Its EBIT was $6 milli...
A: Net income = $3 million EBIT = $6 million Tax rate = 40%
Q: te solution and box the fi
A: Since in this question, payments are not given, so we do by assuming it zero coupon discount bond.
Q: A young couple has decided to make advance plans for financing their 5 year old daughter’s college e...
A: Number of deposits (n) = 10 First deposit one year after today r = 3% Let the annual deposit = A Wit...
Q: Determine the exact simple interest on Php6,500.00 for the period from January 15 to November 20,199...
A: Principal amount (P) = Php 6,500 Period from Jan 15 to Nov 20 (d) = 309 Days Interest rate (r) = 20%
Q: For the next five years, Chard invests 50000 in a bank account at 12%interest. Will the original pri...
A: Principal Amount = 50,000 Interest Rate = 12% Inflation Rate = 75% Time Period = 5 Years
Q: A one-year treasury bill with a face value of $3 million has a nominal interest rate of a nomina...
A: Given The face value of treasury bill is $3,000,000. Term of bill is 1 year.
Q: Carlo and Elise loves to play lottery. They just won Php10,000 in the GongDi WangBu lottery. They de...
A: Future Value refers to the value of the current asset or investment or of cash flows at a specified...
Q: Assume that you start with a balance of $3600 on your credit card. During the first month, you charg...
A: Given Starting balance is $3600 First month charge is $400 Second month charge is $550
Q: is deposited each year into a bank account that pays 8% interest compounded quarterly how much would...
A: The future value of annuity includes the amount being deposited each year and the amount of interest...
Q: analysis, determine which one of the three mutually exclusive alternativ should be selected. Each al...
A: Given First cost , Uniform annual benefit and Salvage value of device A,B & C.
Q: An rrsp is now worth $229,000 after contributions of $3000 at the beginning of every six months for ...
A: Worth of rrsp"Future Value" is $229,000 Paymant type is begining of the period. Semi annual Contribu...
Q: 1. Over the years, Masterson Corporation’s stockholders have provided $34,000,000 of capital when t...
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any ...
Q: dentify whether the following statements about the simple and compound interest methods are true or ...
A: Simple Interest: It is the easiest and quickest method of computing the interest charge on a loan. ...
Q: You win a lottery that will pay you $120,000 per month for 12 months, starting 1 month from now. Wha...
A: Present value of annuity in form of lottery winnings can be calculated as: = Annuity amount * Presen...
Q: To purchase $ 11,900 worth of restaurant equipment for his business, Greg made a down payment of $14...
A: Total amount paid by Greg is equal to: = Down Payment made by Greg + (Number of payments * Payments)
Q: urance’s stock currently sells for $17.25 a share. It just paid a dividend of $2.42 a share (that is...
A: The prices of stock can be determined based on the constant growth model using constant growth of di...
Q: Calculate the Forward Contract Value of an asset with the following data points: • Current Spot Pric...
A: The spot price plus carrying cost and interest is known as forward price. Under forward contracts lo...
Q: Calculate the Forward Price of an asset with the following data points: • Current Spot Price: $58.75...
A: The price of an underlying asset on a future date is known as forward price. This is the price at wh...
Q: andez wishes to have $368,765 in a retirement account 15 years from now. What payment would Noime ha...
A: There is need of proper planning for the retirement and proper planning lead to have good money on r...
Q: Assume a selling price of $88,000, a down payment of $24,000, and a mortgage at 13% for 30 years. If...
A: Here selling price is 88,000 and down payment is 24,000 Hence loan amount = selling price - down pay...
Q: Fred expects to earn a total of 15 percent on his investments. He recently purchased shares of CC Co...
A: Expected return = 15% Price of share = $20 Dividend paid = $1
Q: Cost of plant R3 600 000 Import duty R 900 000 Installation cost R 300 000 Net cash flows Year 1-10 ...
A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first t...
Q: Mr. Lee purchased a small condominium. He paid P350,000 as a down payment and agreed to pay P35,000 ...
A: The price of an asset can be computed by the present value of future payments associated with the as...
Q: Armed with this information, compute: The minimum required return by Cross-Ocean’s debtholders The ...
A: Minimum Required Return: It represents the expected required return to the investors for investing ...
Q: Pearson Motors has a target capital structure of 35% debt and 65% common equity, with no preferred s...
A: Solution:- Weighted Average Cost of Capital (WACC) means the average minimum return required by the ...
Q: Preferred stock generally has a lower after-tax cost than debt to the corporation. True or False Tru...
A: Solution:- We know, preferred stock is hybrid form of common stock and debt. They get periodic divid...
Q: Explain the foreign currency swaps and why are they undertaken? Explain the functional currency and ...
A: A foreign currency swap, also known as an FX swap, is an agreement between two foreign parties to ex...
Q: tandard Deviation: 10.56% Average Risk Free Rate: 2.18% Using these figures: a) Select the best o...
A: The portfolio should have good return but should be also less risky so both should be there to be be...
Q: A put option with an exercise price of P90 was priced at P4. At expiration, the underlying stock is ...
A: Put options are a form of option whose value rises when the price of a stock declines. A put lets th...
Q: Annette has just purchased a new home for $562758. She put 25% down and is paying the remainder off ...
A: The present value of the loan is equal to the sum of the present values of all future monthly instal...
Q: Problem 3: You save $320 per month, 2.36 APR compounded monthly, save for 30 years Create Excel form...
A: "Hi, Thanks for the Question. Since you asked multiple question, we will answer first question for y...
Q: Acme Food Co. Ltd. is considering the introduction of a new product Smackers. The firm has gathered ...
A: NPV Net present value (NPV) is the present value of all cash inflows less the present value of cash ...
Q: You are required to assess whether the decision to renovate will be profitable by using a BCR.
A: Benefit-cost ratio (BCR) refers to the ratio which shows the relationship between present value of b...
Q: Carlo Aldric wants to have P40,000 per year for 15 years during his retirement. What amount would yo...
A: Annual amount (P) = 40,000 Interest rate (r) = 5% Period (n) = 15 Years
Q: The most stringent measure of the liquidity status of a business firm. a. Current ratio b. Quick Rat...
A: Current ratio is calculated by dividing the total current assets by the total current liabilities an...
Q: The following exponential growth equation is used to calculate a given quantity's growth over a set ...
A: Future value is the value of an initial amount given a certain growth rate and number of periods. It...
Q: During the month of January, direct labor cost totaled PhP850,000 and direct labor cost was 60% of p...
A: Labor cost = Php 850,000 Labor cost ratio in prime cost = 60% Prime cost = 850,000/0.60 = Php. 14166...
Q: You have just graduated from the BTEC program of UTAS and one of your favorite courses was “Entrepre...
A: Cashflow of year 0 = -130,000 Cashflow of year 1 = -10,000 , 20,000 Cashflow of year 2 = 30,000 Cash...
Q: Jun has decided to save money roughly P25 per week. Suppose he makes weekly deposits of this money i...
A: Compounding is also termed as an interest on interest which means that a company calculates interest...
Q: What is a stock's realized abnormal return if the stock had a 3% return and the stock had a Beta=1.2...
A: Realized return Realized return is referred to as the actual return earned by the stock and is also ...
Step by step
Solved in 2 steps with 2 images
- Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?Net present value method for a service company Coast-to-Coast Inc. is considering the purchase of an additional delivery vehicle for 70,000 on January 1, 20Y1. The truck is expected to have a five-year life with an expected residual value of 15,000 at the end of five years. The expected additional revenues from the added delivery capacity are anticipated to be 65,000 per year for each of the next five years. A driver will cost 40,000 in 20Y1, with an expected annual salary increase of 2,000 for each year thereafter. The annual operating costs for the truck are estimated to be 6,000 per year. a. Determine the expected annual net cash flows from the delivery truck investment for 20Y120Y5. b. Compute the net present value of the investment, assuming that the minimum desired rate of return is 12%. Use the present value table appearing in Exhibit 2 of this chapter. c. Is the additional truck a good investment based on your analysis? Explain.Average rate of returncost savings Maui Fabricators Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of 125,000 with a 15,000 residual value and an eight-year life. The equipment will replace one employee who has an average wage of 28,000 per year. In addition, the equipment will have operating and energy costs of 5,150 per year. Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment.
- MODIFIED ACCELERATED COST RECOVERY SYSTEM Using the information given in Exercise 5Apx-1B and the rates shown in Figure 5A-4, prepare a depreciation schedule showing the depreciation expense, accumulated depreciation, and book value for each year under the Modified Accelerated Cost Recovery System. For tax purposes, assume that the computer has a useful life of five years. (The IRS schedule will spread depreciation over six years.)Using the sum-of-the-years-digits method, how much depreciation expense should Vorst record in 2020 for Asset B? a. 6,000 b. 9,000 c. 11,000 d. 12,000Compute the depreciation for the forecast 3 years for an asset pf 10700 costs the asset life 10 years at the end of these 10 years the residual value is 700 ....
- A machine having a first cost of P 60,000.00 will be retired at the end of 8 years. Depreciation cost is computed using a constant percentage of the declining book value. What is the total cost of depreciation in pesos, up to the time the machine is retired if the annual rate of depreciation is 28.72%?A machine costing P 720,000 is estimated to have a book value of P 40, 545.73 when retired at the end of 10 years. Depreciation cost is computed using a constant percentage of the declining value. What is the book value after 3 years?Engineering Economy Compute the book value of an asset with FC of ₱4 500 000 after 7th year if it has useful life of 13 years and annual depreciation rate of 7%. Use declining balance method. Prepare the depreciation table and show Complete solution
- A machine costing P720,000.00 is estimated to have a life of 10 years. If the annual rate of depreciation is 25%, determine the total depreciation using the constant percentage or declining balance methodAssuming modified accelerated cost-recovery-system depreciation and an economic life of five years, what is the book value after three years of an asset of initial cost P? OA. 0.288P OB. 0.422P OC. 0.808P OD. 0.852PEngineering Economy Compute the book value of an asset with FC of ₱4 500 000 after 7th year if it has useful life of 13 years and annual depreciation rate of 7%. Use declining balance method. Prepare the depreciation table