The ________ a capital asset is NOT part of the MACRS and is ignored for depreciation expense. A) salvage value of B) dividends paid from C) inventory from D) straight-line value of ANSWER Answer: A
Date: September 19th, 2020
A firm is considering purchasing an asset that will have a useful life of 8 years and cost $5.5 million; it will have installation costs of $90,000 and a salvage or residual value of $1,600,000. What is the annual straight-line depreciation for this asset A) $400,000 per year B) $422,000 per year C) $498,750 per […]
Date: September 19th, 2020
The advantage of ________ over ________ depreciation is that you can write off more of your capital costs in the earlier years. A) straight-line depreciation; the modified accelerated cost recovery system B) straight-line depreciation; straight-line deductions C) MACRS; straight-line depreciation D) MACRS; straight-line deductions ANSWER Answer: C
Date: September 19th, 2020
________ costs each year do not reflect cash flow because the actual purchase and installation (outflow of dollars) of the asset have already taken place. A) Depreciation B) Sunk C) Opportunity D) Working Capital ANSWER Answer: A
Date: September 19th, 2020
A firm is considering purchasing an asset that will cost $5 million. Other depreciable costs include $800,000 in installation costs. If the asset is classified in the 5-year class, what is the annual depreciation for years 1, 3, and 6 for this asset, using the fixed depreciation percentages given by MACRS? (The percentages are 20.00%, […]
Date: September 19th, 2020
Short-term financial management is concerned with management of a firm’s current assets and current liabilities to achieve a balance between profitability and risk. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following was NOT mentioned by Akerlof to mitigate the lemons problem? a. certification b. using a costly signal c. private negotiation d. establishing a reputation e. contract enforcement ANSWER C
Date: September 19th, 2020
A firm is considering purchasing an asset that will cost $1 million. Other depreciable costs include $100,000 in installation costs. If the asset is classified in the 3-year class, what is the annual depreciation for each year for this asset using the fixed depreciation percentages given by MACRS? (The percentages are 33.33%, 44.45%, 14.81%, and […]
Date: September 19th, 2020
Firms are able to reduce financing costs or increase the funds available for expansion by maximizing the amount of funds tied up in working capital. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The advantage of straight-line depreciation over MACRS depreciation is that you can write off ________. A) more of your total capital costs B) your capital costs in fewer years C) a larger percentage of your capital costs earlier D) None of the above ANSWER Answer: D
Date: September 19th, 2020
