Response:
The result is 20.5 years.
Clarification:
Assuming compound interest, the spending increase on equipment with a 9% annual rate reveals that in the 20th year, $476,374 will be spent on equipment, and in the 21st year, $519,248. Therefore, by the transition between the 20th and 21st years, funding for equipment will be depleted.
I trust this response assists you.
The correct response is Option D. Owners' equity indicates the funds provided by owners for business operations, incorporating initial investments and accumulated profits. In this scenario, the $800 expense does not result in any new assets or liabilities; hence, it will impact the income statement by reducing profits, thus lowering owners' equity.
The net capital expenditure for Beta is 95.
Explanation:
To determine Beta's net capital expenditure, use the formula below
Closing PP&E + Depreciation Expense - Opening PP&E
= 170 + 75 - 150
= 95
In this computation, the depreciation expense is added, and the PP&E balance is subtracted from the closing PP&E balance to obtain a precise figure.
Alternatively, it can be calculated based on the capital expenditures derived from a company's income statement and balance sheet. Check for the depreciation expense recorded for the current period in the income statement and find the current period’s property, plant, and equipment in the balance sheet.
Answer:
- No, he will not accumulate sufficient funds to purchase his delivery truck after 6 years.
Explanation:
To determine how much money Earl Miller—the owner of the Papa Gino's franchise—will have available in 6 years, it's necessary to assess the worth of the $20,000 he plans to invest at a 5% interest rate compounded semiannually:
With semiannual interest: 5% / 2 = 0.05/2 = 0.025
Equation:
Here, r/n was calculated previously: r/n = 0.05/2 = 0.025; and t refers to the time in years: 6.
Thus, the future value of the investment would fall short of the truck's price, meaning
he will not be able to afford the delivery truck after 6 years.
