Answer:
Dep expense for the second year 7,600
Explanation:
1/10 = straight-line method
straight-line x 2 = DD rate
47,500 x 2/10 = 9500
then we calculate the DD rate again with the book value
47,500-9,500 = 38,000
38,000 x 2/10 = 7,600
You are considering two perpetuities which are identical in every way, except that perpetuity A will begin making annual payment
1 answer:
Answer:
E) B exceeds that of A by the PV of $P for one year.
Explanation:
A begins in 2 years in the future, while B starts one year into the future:
B:
A:
The difference is this one year difference which, makes the return on A lower than B today. After the two years, past and both perpetuities begin, their value will be the same.
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Answer: D. 2.2%
Explanation: Equity Dividend Rate is calculated by dividing the Before Tax Cash Flow by the Acquisition price. If you need the answer in percentage form, you then multiply by 100.
Here, before-tax cash flow = $11,440
Acquisition price = $520,000
So Equity Dividend Rate = X 100
Equity Dividend Rate = 2.2%
In this question, you do not need the Net Operating Income (NOI). You only need the NOI if the Before Tax Cash Flow is not given and the debt service payment is. If this is the case, you subtract the debt service payment from the NOI to get the Before Tax Cash Flow.