Don and warren formed an equal partnership to build drag racing vehicles. don contributed $5,000 in cash and warren contributed a truck with a fair market value of $5,000 and an adjusted tax basis of $4,500. they plan to use the truck for hauling parts and cars. when warren purchased the truck 1 year earlier, he elected to use the straight line method to depreciate the truck using the midmonth convention over its 5- year recovery period. the partnership should: a. record the truck on the books at $5,000 and depreciate it using the allowable method and convention over a 5-year recovery period. b. record the truck on the books at $5,000 and depreciate it over its remaining recovery period using the straight line method and midmonth convention. c. record the truck on the books at $4,500 and depreciate it over its remaining recovery period using the straight line method and midmonth convention. d. record the truck on the books at $4,500 and depreciate it using the allowable method and convention over a 5-year recovery period.

Ashare stock is a small piece of ownership in a company ture or false

When interest is compounded continuously, the amount of money increases at a rate proportional to the amount s present at time t, that is, ds/dt = rs, where r is the annual rate of interest. (a) find the amount of money accrued at the end of 3 years when $4000 is deposited in a savings account drawing 5 3 4 % annual interest compounded continuously. (round your answer to the nearest cent.) $ (b) in how many years will the initial sum deposited have doubled? (round your answer to the nearest year.) years (c) use a calculator to compare the amount obtained in part (a) with the amount s = 4000 1 + 1 4 (0.0575) 3(4) that is accrued when interest is compounded quarterly. (round your answer to the nearest cent.) s = $

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?