Sinking Fund Method
Q: What is a benchmark and why is there a need to compare the fund's return vis-a-vis a benchmark?
A: Benchmark is considered as a standard against which the actual performances of the securities are…
Q: When do the funds earn interest at the MARR?
A: The MARR (Minimum Acceptable Rate of Return), generally referred to as hurdle rate is the lowest or…
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A: The process through which an investor evaluates their investment projects is regarded as capital…
Q: Differentiate between Closed-End and Open-End funds
A: The question is related to Mutual Funds. On the basis of functional classification funds are of two…
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A: An index fund and actively managed fund are different investment vehicles. They have been explained…
Q: Give two examples of capital receipts which are directly added to the capital fund.
A: A capital receipt is a receipt for the business that either create a liability or results in the…
Q: c) Calculate Jensen's measure of performance for Wildcat Fund. d) Assuming that the Wildcat fund…
A: Jensen's measure of performance for Wildcat Fund is calculated with the help of following formula…
Q: What is meant by the sinking-fund factor (SFF)?
A: The sinking fund factor is the calculation that tells the investor how much of an annuity payment…
Q: What is meant by statement of net position of proprietary funds?
A: Proprietary funds: They are funds used in governmental accounting to record the activities that…
Q: Explain the meaning of asset and liability management through the Pool Fund Approach.
A: Asset/liability management is the technique of controlling the use of assets and cash flows in order…
Q: What is the purpose of using the retained funds?
A: After paying the dividends, the company retains the remaining net income which is called addition to…
Q: = sinking fund formula, calculate the
A: Payment per month refers to the amount which a borrower should at the end of each month or period to…
Q: Analyze the advantages of an index fund or a fund of funds. Explain in details
A: Mutual funds is an investment vehicle that pools out funds from large number of investors and invest…
Q: (Trust fund) What is outright distribution? Give example or a scenario (use simple words so its…
A: A trust is created on the some specific or general purpose. Under trust, the property like assets or…
Q: Classify the type of financial formula for the information given. Lump-Sum Problems P A known…
A: The investors are estimating the return and maturity value before making investment in any security.…
Q: Define tapping fund assets
A: Fund asset: It can be defined as the value of cash, securities, and other holdings related to a…
Q: Define sinking fund
A: Fund: A fund is a pool of money save for a particular purpose. Those pools can be frequently…
Q: Define the term equal-payment-series sinking-fund factor?
A: Equal payment series sinking fund: In this method of investing mode, the goal is determine the equal…
Q: Sinking Fund under Cash and Cash Equivalents?
A: Sinking Fund is a fund that contains cash which is set aside to pay off a long term debt or bonds…
Q: Cost of funds of new re issues New debr financing New equity financing
A: There are many ways of financing of project equity, debt and internal financing.
Q: In which phase(s) of a closed-ended fund's lifecycle is capital committed? C a C b. Formation c.…
A: A closed-end fund is a collection of investment funds based on the supply of a fixed number of…
Q: 3 what is the difference between a sinking fund and a call feature ?
A: Bonds are debt instruments. These are issued by the borrowing organizations to raise debt. Bonds…
Q: Define Capital Market Line (CML)
A: Introduction: Risk refers to the degree of volatility involved in the anticipated return on…
Q: Define reserve borrowing capacity
A: The question is based on the concept of capacity to borrowing of a firm based on the concept of…
Q: How to rate a PE Fund? (using the S&P scaling). The known factors are: GP experience, AUM, Vintage…
A: Private value reserves are pools of cash-flow to be put resources into organizations that address a…
Q: How much will be in the fund a
A: Time value of money (TVM) means that the sum money received in the present will have more value…
Q: What is the sinking-fund factor? How and why is it used?
A:
Q: (A Equity fund В Bond fund Balanced fund D Money market fund
A: Tax Slip from Canadian Mutual fund, showing below mentioned Income Capital Gain $1000 Dividend…
Q: Explain private equity (PE) fund
A: Private placement of equity shares for financing any business and avoiding the market is known as…
Q: Explain term sinking-fund factor (SFF)?
A: Sinking-fund factor (SFF) refers to a ratio that is used to compute the future value of an annuity…
Q: what is the difference between a growth fund and balanced fund?
A: Growth and Balanced mutual funds are important tools of investing with certain different risk return…
Q: Explain the different types of funds categories?
A: Funds can be defined as the pool of money from an individual, company, or cooperation that is…
Q: Explain the sinking fund.
A: A Loan refers to the amount of money taken by one party named borrower from the other party named…
Q: assumptions/drawbacks that the four measures of fund performance share with the Sharpe Ratio,…
A: Introduction:- Portfolio management refers to the management of portfolio. This is done with the…
Q: What are the advantages of evaluating fund performance based on Internal Rate of Return (IRR)? Why…
A: The internal rate of return is the expected annual growth rate from an investment. Whenever the IRR…
Q: estimate of external funds require
A: Calculation of external funds required- ERF = (A/S - L/S) ∆S- MS1(1-D) A/S = Total assets/Sales L/S…
Q: ou fund and
A: NPV= Present value of cashinflows - Present value of cashoutflows.
Q: Return on Plan Assets?
A: Every business needs to incur expenses for paying retirement benefits to the employees. Companies…
Q: ..............is the organizations , institutions that provide long term funds . Select one : a .…
A: Capital market is the market where corporates raise capital like shares , bonds and long term…
Q: What is money market fund?
A: Introduction: Money market is a market place where the short-term securities transactions are made.…
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- Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for ten years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
- Montezuma Inc. purchases a delivery truck for $20,000. The truck has a salvage value of $8,000 and is expected to be driven for ten years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After five years of recording depreciation, Montezuma determines that the delivery truck will be useful for another five years (ten years in total, as originally expected) and that the salvage value will increase to $10,000. Determine the depreciation expense for the final five years of the assets life, and create the journal entry for years 6–10 (the entry will be the same for each of the five years).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?Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.
- Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.
- Urquhart Global purchases a building to house its administrative offices for $500,000. The best estimate of the salvage value at the time of purchase was $45,000, and it is expected to be used for forty years. Urquhart uses the straight-line depreciation method for all buildings. After ten years of recording depreciation, Urquhart determines that the building will be useful for a total of fifty years instead of forty. Calculate annual depreciation expense for the first ten years. Determine the depreciation expense for the final forty years of the assets life, and create the journal entry for year eleven.Susquehanna Company purchased an asset at the beginning of the current year for 250,000. The estimated residual value is 25,000. Susquehanna estimates that the asset will be used for 10 years and uses straight-line depreciation. Calculate the depreciation expense per year.Calico Inc. purchased a patent on a new drug it created. The patent cost $12,000. The patent has a life of twenty years, but Calico expects to be able to sell the drug for fifty years. Calculate the amortization expense and record the journal for the first years expense.