Answer: 16.33%
Explanation:
With the details given, the best method of Calculating the expected rate of return is the Capital Asset Pricing Model (CAPM).
The formula is,
Er = Rf + b(Rm - Rf)
Where,
Er is expected return
Rf is the risk free rate
b is beta
Rm - Rf is the Market Premium
Er = 3.87% + 1.38(9.03)
= 3.87% + 12.4614%
= 16.33%
The model accounts for inflation by including the risk free rate which is already adjusted for inflation.
Answer: $6780
Explanation:
Asset recorded in books of timble will be:
= (PVAF at 5%, 8 × Annual CF) + (PVAF at 5%,8 × salvage)
where CF = cash flow
PVAF = present value of annuity factor
= (6.80 × 9000 ) +(0.66 × 10000)
= 61200+ 6600
= $ 67800
Since the equipment has an expected life of ten years with no anticipated salvage value, then the depreciation will be:
Depreciation = 67800 ÷ 10
= $ 6780
I think it’s higher the risk and the lower present value
Answer:
$11,457,522
Explanation:
If the full extended warranty costs are $113 per unit replaced, and 20% of the 506,970 units sold will be replaced, then the total warranty costs are:
total warranty costs = total number of units sold x percentage of units that need warranty replacement x cost per unit replaced
total warranty costs = 506,970 units x 20% x $113 per unit = $11,457,52
Answer:
B) $1,800.
Explanation:
$14,000 in medical expenses are not part of Samuel's gross income.
$7,000 in disability payments are not included in Samuel's gross income because he paid the premiums.
$4,000 in pain and suffering compensation are not part of your gross income.
The only payments that are part of Samuel's gross income and therefore are taxed, are his regular monthly salary payments = $1,800. If Samuel's disability insurance premium had been paid by his employer, then the $7,000 would have been taxable.