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seropon [69]
2 years ago
9

5. Immediately after a used truck is acquired, a new motor is installed and the tires are replaced at a total cost of $5,750. Is

this a capital expenditure or a revenue expenditure
Business
2 answers:
eduard2 years ago
6 0

Answer:

CAPITAL EXPENDITURE

Explanation:

In accounting, an expense carried out is considered to be capital expenditure when the asset is an investment with a life of more than one year or a newly purchased capital asset or an expense which improves the useful life of an existing capital asset.

Capital Expenditure is the money an organization or firm uses to purchase, maintain, upgrade or improve its fixed assets such as vehicles, production equipment, buildings or land.

Capital expenditures on fixed assets may include everything ranging from repairing a roof to building, to purchasing a new vehicle or upgrading a newly purchased used vehicle.

Therefore, the total costs of $5,750 used in the installation of a new motor and replacement of the tires are the CAPITAL EXPENDITURE.

Other examples of CAPITAL EXPENDITURE are costs of:

- Buildings (with costs to extend useful life)

- Land (with the cost of upgrading land e.g irrigation system setup, land clearing, etc)

- Machinery (with costs of transporting equipment to factory)

etc.

Alex Ar [27]2 years ago
5 0

Answer: Capital Expenditure

Explanation:

Capital Expenditure occurs if the expense made was to enhance the capability of an asset to perform the role for which it was acquired over an extended period of time.

The new motor and tires will go a long way in making sure that the Truck benefits the company over a long period of time and so should be considered CAPITAL EXPENDITURE.

Do comment if you need any further clarification.

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29. Maxwell is trying to decide whether to accept a salary of $60,000 or a salary of $25,000 plus a bonus of 20% of net income a
Akimi4 [234]

Answer:

Maxwell world consider choice equal to $310000

Explanation:

given data

accept a salary = $60,000

salary = $25,000

bonus = 20% of net income

to find out

amount of income would be necessary so that Maxwell would consider

solution

we get here income by bonus that is express as

bonus = 2 ( income - bonus - salary )   ..............1

3500 = 2 ( income - ( 0.2 × 35000 ) - ( 0.2 × (75000 + 35000) )

solve it we get

income = $310000

so Maxwell world consider choice equal to $310000

3 0
2 years ago
Which of the following statements is CORRECT? a. The advantage of the basic earning power ratio (BEP) over the return on total a
leonid [27]

Answer: The advantage of the basic earning power ratio (BEP) over the return on total assets for judging a company's operating efficiency is that the BEP does not reflect the effects of debt and taxes

Explanation:

a. This is correct.

The advantage of basic earning power ratio over the return on the total assets for judging a firm's operating efficiency is that the basic earning power does not reflect effects of debt and taxes.

b. This is incorrect.

Only the price/earnings ratio of the company will tell us nothing about a company. When we compare the price/earnings of a company with the peers, we would know whether such company is under valued, or over valued or maybe fairly valued.

c. This is incorrect.

The total assets is made up of total liabilities plus the shareholders equity, when other things are held constant, less debt simply means less liabilities. To balance both sides, the total assets should reduce as the shareholder's equity is constant. When total assets decreases, the return on the assets will increase.

d. This is incorrect.

We can reach a conclusion on which firm is better managed based on the facts given. The debt ratio is the total liabilities divided by total assets, and a lower ratio is known to be good in comparison to a higher ratio. Similarly, the profit margin is the profit divided by the sales, and low profit margin shows high expenses and also a need for the management to decrease the expense.

3 0
2 years ago
Earl Miller, owner of a Papa Gino's franchise, wants to buy a new delivery truck in 6 years. He estimates the truck will cost $3
Studentka2010 [4]

Answer:

  • <u><em>No, he will not have enough money to buy his delivery truck at the end of 6 years.</em></u>

Explanation:

To find how much<em> money Earl Mille</em>r, <em>owner of Papa Gino's franchise</em>, will have in <em>6 years</em>, you must calculate the value of the <em>$20,000</em> that he <em>invests</em> at the <em>5% compounded semiannually:</em>

  • Semianual compounded interest: 5% / 2 = 0.05/2 = 0.025

Equation:

  • Value=Investment\times (1+r/n)^{(n\times t)}

Where r/n was already calculated: r/n = 0.05/2 = 0.025; and t is the number of years: 6.

        Value=\$20,000\times (1+0.025)^{(2\times 6)}\\\\Value=\$26,899.78

Hence the value of the money invested is less than the value of the truck, and <em>he will not have enough money to buy his delivery truck at the end of 6 years.</em>

3 0
2 years ago
Wendy wants to start a business. She knows many unaccredited investors who she knows will help her jumpstart her business. What
vodka [1.7K]

Available Options are:

A. Investors' allowable investment depends on the accredited or non-accredited status.

B. Investors may invest a combined $50 million within a 12-month period.

C. Investors may invest no more than $1 million combined for the first year of the business.

Answer:

Option C. Investors may invest no more than $1 million combined for the first year of the business.

Explanation:

The non-accredited investors do not invest more than $1 million for first year. Furthermore, for Investor it also imposes investment in current business conditions which says that Investor can invest in its business with greater of:

1. $2000

2. Or the lesser of (If the net worth of Wendy is less than $100,000)

  • 5% of its total income for the year
  • Net worth

There is also an option which is available if the net worth of Investor exceeds above $100,000 then he can invest up to lesser of 10% of his income or net worth, otherwise he will have to follow the above conditions.

Here, it also has an upper limit, which means that the investor can not invest more than $100,000 in the subsequent year, whatever the level of net worth or income he had for the year.

This means the non-accredited investor can not invest more than $1 million.

3 0
2 years ago
An ad for Maybelline age-minimizing makeup in Ladies' Home Journal magazine featured actress Melina Kanakaredes and offered read
mina [271]

Answer:

The correct answer is C

Explanation:

A brand named Maybelline released an ad for the product of age minimizing makeup and offering the readers the $1 off coupon, so in terms of the communication, the source is the term which is described as the person or the reader who use the service or the product.

Therefore, the source of the ad is the readers who redeem the coupon featuring off $1 on the product.

3 0
2 years ago
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