The tax on depreciation requires several steps to calculate. We have to add the $70,000 base cost and $15,000 modification to get the depreciable cost of the equipment, which is $85,000. We then use the depreciation rates of .33, .45 and .15 for years 1, 2 and 3 respectively to find the depreciation expense. We can then apply the 40% tax rate to those expenses.
The rental price of capital? The real wage? c. Suppose that a gift of capital from abroad raises the capital stock by 10 percent. What happens to total output (in percent)? The rental price of capital?
years. | | The step-by-step calculation is: P | = | S(1 + rt)-1 | | | = | 400,000(1 + 0.0892 x 0.24657534...)-1 | | | = | 400,000 x 0.97847883... | | | = | $391,391.53 | Rounded as last step | b)You are correct. When the first bill matures at time 90 days, the investor purchases a second bill. We must find the purchase price of the second bill. This can be displayed on a time line: | | | | | $P | $400,000 | | | | | | 0 | 90 | 180 | 270 | | | | | | | | | P | = | price | = | unknown | | S | = | Maturity value | = | $400,000 | | r | = | Simple interest rate (decimal) | = | 9.16 | 100 | | = | 0.0916 | | t | = | Time period (years) | = | 90 | 365 | | = | 0.24657534... years.
Now, what would be the impact on net income, total profit margin, and cash flow? Their depreciation would be $750,000. The total revenue minus total expense will equal net income. Net income and revenue will be times by 100 to get the profit margin. Net income plus depreciation will equal their cash flow.
$10.05 o If the firm borrows $40 of the $100 at an interest rate of 10%, what are the firm's net earnings? $7.37 No financial leverage With financial leverage Sales $200 $1,600 Expenses $185 $185 EBIT 15 15 Interest 0 $4 EBT 15 11 Taxes 4.95 3.63 Net earnings $10.05 $7.37 o What is the return on the owners' investment in each case? Why do the returns differ? Return on equity: $10.05/$100 =10.05% $7.37/$40 = 18.425% The return for b is higher due to the financial leverage use being successful. The reduction of taxes with the financial leverage resulted in a reduction in taxes from the interest expense.
Ft = 80 + 15t where F t = annual sales (000 bottles ) t = 0 corresponds to 1990 a. Indicate how much the sales are increasing or decreasing? Sales are increasing by 15,000 bottles per year b. Predict sales for the year 2006 using the equation? This is a manual problem!
Reflection questions about the Drake equation: Equation | Minimum values | Maximum values | R= | 1 | 7 | Fp= | 0.4 | 0.6 | Ne= | 2 | 2.5 | F1= | 0.5 | 1 | Fi= | 0.001 | 1 | Fc= | 0.5 | 0.8 | L= | 10,000 | 200,000 | N= | 2 | 1,680,000 | What value did you get for the number of civilizations? After calculating the maximum and minimum values of the equation through researching them individually, the minimum value of the Drake equation, N = R x fp x ne x f1 x fi x fc x L, was N = 2. The values were as such: * R = 1 * fp = 40 % (0.4) * ne = 2 * f1 = 50% (0.5) * fi = 0.001 * fc = 50% (0.5) * L = 10,000 (1 x 0.4 x 2 x 0.5 x 0.001 x 0.5 x 10000). These figures lead the end of the equation at the number of communicative civilizations at N = 2; meaning there is a minimum of 2 expected communicative civilizations in the galaxy. The maximum value that was proposed for the Drake equation, N = R x fp x ne x f1 x fi x fc x L, was N = 1,680,000.
Part (b) Calculate the seasonal forecast of sales for February of Year 3. Part (c) Which forecast do you think is most accurate and why? 11. Question : (TCO 6) Davis Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project A Project B Initial Investment $800,000 $650,000 Annual Net Income $50,000 45,000 Annual Cash Inflow $220,000 $200,000 Salvage Value $0 $0 Estimated Useful Life 5 years 4 years The company requires a 10% rate of return on all new investments.
Let (R/P)1 equal the initial value of the real rental price of capital, and (R/P)2 equal the final real rental price of capital after the labour force increases by 10 percent. The rental price increases by The real rental price also increases by 6.9 percent. Let (W/P)1 equal the initial value of the real wage, and (W/P)2 equal the final real wage after the labour force increases by 10 percent. The real wage increases by The real wage decreases by 2.8 percent. c) Using the same logic as (b) So, output increases by about 3 percent.
However, this annual "surplus" is expected to change to a deficit around 2015, when payments begin to exceed receipts and interest thereafter. The fiscal pressures are due to demographic trends, where the number of workers paying into the program continues declining relative to those receiving benefits. The number of workers paying into the program was 5.1 per retiree in 1960; this declined to 3.3 in 2007 and is projected to decline to 2.1 by 2035.Further, life expectancy continues to increase, meaning retirees collect benefits longer. Federal Reserve Chairman Bernanke has indicated that the aging of the population is a long-term trend, rather than a proverbial "pig moving through the python.” The accumulated surpluses are invested in special non-marketable Treasury securities (treasuries) issued by the U.S. government, which are deposited in the Social Security Trust Fund. At the end of 2009, the Trust Fund stood at $2.5 trillion.