COST ACCOUNTING
CAPITAL BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$(11.350)
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$11.350
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$33.865
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$59.490
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Detailed explanation-1: -Answer and Explanation: To calculate for the depreciation expense, use the accumulated depreciation account. The depreciation expense in 20X4 is $1, 170.
Detailed explanation-2: -The calculation of depreciation using the declining-balance method a. ignores salvage value in determining the amount to which a constant rate is applied.
Detailed explanation-3: -The accounting rate of return (ARR) formula is helpful in determining the annual percentage rate of return of a project. ARR is calculated as average annual profit / initial investment. ARR is commonly used when considering multiple projects, as it provides the expected rate of return from each project.
Detailed explanation-4: -Calculate the individual present values Convert the WACC to a decimal from a percentage and add it to one. Then, divide the cash flow for the period by the result. Continue this for each period of time until complete. You can multiply the WACC plus one calculation by itself for each additional time period.