# Muddy Meadows Earthmoving can purchase a bulldozer for \$147,000. After 7 years of use, the bulldozer should have a salvage value of \$50,000. What depreciation is allowed for this asset in Year 4 for.(a) Straight-line depreciation?(b) 150% declining balance depreciation?(c) 40% bonus depreciation with the balance using 5-year MACRS?PLEASE DO NOT USE EXCEL AND SHOW CALCULATIONS1.) a) \$13,857; b) \$15,676; c) \$10,1612.) \$13,857; b) \$15,676; c) \$44663.) \$21,000; b) \$15,676; c) \$10,1614.) \$13,857; b) \$12,437; c) \$10,161

1) a. \$13,857 : b. \$15,676 : c. \$10,161

Explanation:

(a) Straight-line depreciation:

depreciation expense per year = (\$147,000 - \$50,000) / 7 = \$13,857 per year

(b) 150% declining balance depreciation:

150% depreciation = 1/7 x 1.5 = 21.42%

depreciation expense year 1 = \$147,000 x 1/7 x 1.5 = \$31,500

depreciation expense year 2 = \$115,500 x 1/7 x 1.5 = \$24,750

depreciation expense year 3 = \$90,750 x 1/7 x 1.5 = \$19,446

depreciation expense year 4 = \$71,304 x 1/7 x 1.5 = \$15,279 (this number is similar to \$15,676, so I will choose that number. Depreciation % may vary a little due to rounding)

(c) 40% bonus depreciation with the balance using 5-year MACRS:

depreciation expense year 1 = \$147,000 x 40% = \$58,800

depreciation expense year 2 = \$88,200 x 32% = \$28,224

depreciation expense year 3 = \$88,200 x 19.20% = \$16,934

depreciation expense year 4 = \$88,200 x 11.52% = \$10,161

## Related Questions

Which of the following elements is exclusive to the services marketing mix, and not the traditional marketing mix?a) processb) productc) priced) placee) promotion

a) process

Explanation:

The P's are Product, Pricing, Place, Promotion, People, Process and Physical Evidence and for Traditional Marketing is Product, Pricing, Place and Promotion

Columbia Construction Company earned \$442,000 during the year ended June 30, 2014. After paying out \$225,794 in dividends, the balance went into retained earnings. If the firm's total retained earnings were \$847,935 at the end of fiscal year 2014, what were the retained earnings on its balance sheet on July 1, 2013?

\$631,729

Explanation:

The amount indicated as retained in a balance sheet is the accumulated amount of retained earning since inception.

A company's profits are shared between dividends and retained earnings.

The Columbia company made profits of  \$442,000  on June 30, 2014

Amounts paid out as dividends on June 30 were  \$225,794

The retained earnings for June 2014 will be:

If net profits = retained earnings + dividends

retained earning will be earning - dividends payouts

=\$442,000- \$225,794

=\$216,206

retained earning for June 2104  is 216,206

The accumulated retained earnings as of June 14, 2014, were \$847,935,

retailed earning as of June 30, 2013, were

Accumulated retained earning by June 30, 2014 minus retained earnings earned on June 30, 2014

\$847,935,-\$216,206

=\$631,729

Consider how McKnight Valley River Park Lodge could use capital budgeting to decide whether the \$ 11 comma 500 comma 000 River Park Lodge expansion would be a good investment. Assume McKnight ​Valley's managers developed the following estimates concerning the​ expansion: LOADING...​(Click the icon to view the​ estimates.) Assume that McKnight Valley uses the​ straight-line depreciation method and expects the lodge expansion to have a residual value of \$ 950 comma 000 at the end of its ten​-year life. The average annual net cash inflow from the expansion is expected to be \$ 2 comma 779 comma 548. Compute the payback for the expansion project. Round to one decimal place.

4.1 years

Explanation:

The payback period is the time it takes the project to recover the initial investment required to carry it out.

We are not given any information about the actual yearly revenues and costs, but you give the average net cash flow per year, so we can use that amount to calculate the payback period:

the payback period = total investment / net cash flow = \$11,500,000 / \$2,779,548 = 4.137 ≈ 4.1 years

Which of the following is a normative economic statement? The poverty rate hit a new high last year and income distribution also worsened. Health care accounts for roughly a third of total spending in the economy. The government needs to revamp the Social Security program to make it sustainable. Retail sales are expected to continue on their downward trend in the next three quarters.

The government needs to revamp the Social Security program to make it sustainable.

Explanation:

A normative economic statement is always a suggestion for the economy, whereas a descriptive economic statement is a statement providing information, as it states the facts and do not provide any suggestion.

Here, in given instance the statement,

Government needs to improve or form the Social Security Program, so that the program is sustainable, is a suggestion and not a fact.

Thus, it is a normative economic statement.

Among the provided statements, the one suggesting the government needs to revamp the Social Security program to be sustainable is the normative economic statement due to its prescription for improvement.

### Explanation:

Normative economics involves judgments and prescriptions for economic policies or outcomes. Among the provided statements, 'The government needs to revamp the Social Security program to make it sustainable' is a normative economic statement. This statement is normative because it is based on value judgments and expresses an opinion on how things should be. It suggests a course of action that ought to be pursued to improve the Social Security program and doesn't merely describe factual aspects of the economy like the rest of the statements do.

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Assume that your credit sales for March was \$12,764,for April was \$27,406 and May was \$28,706. If credit sales are collected 55% during the month of sale, 25% the month following the sale, and 15% in the second month following the sale, what is the total expected cash collections to be received in May? Round your answer to one dollar.

Total expected cash collections for May are \$24554

Explanation:

The May's cash collections will include collections from March's credit sales worth 15% of March's sales, collections for April's credit sales worth 25% of April's credit sales and collections worth 55% of t=May's credit sales. Thus the collections are,

Collection for March's sales = 12764 * 0.15  =  \$1914.6

Collection for April's sales = 27406 * 0.25 = \$6851.5

Collection for May's sales = 28706 * 0.55 = \$15788.3

Total expected cash collections for May = 1914.6  +  6851.5  +  15788.3

Total expected cash collections for May = \$24554.4 rounded off to \$24554

Cooley Company's stock has a beta of 1.40, the risk-free rate is 25%, and the market risk premium is 5.50%. What is the firm's required rate of return

Explanation:

Given the variables available, the required rate of return can be computed using the Capital Asset Pricing Model with the formula;

Required Return = Risk-free rate + beta ( Market risk premium)

Required return = 4.25% + 1.4 * 5.5%

Required return = 4.25% + 7.7%

Required return = 12.2%

Note; The actual question says the Risk-free rate is 4.25%.