Reference no: EM13890160
Huffman corporation construct a building at cost of $20 million. Average accumulated expenditures were $8 million, actual interest was $1,200,000, and avoidable interest was $100,000. If the salvage value is $1,600,000, and it useful life is 40 years, depreciation expense for the first full year using the straight-line method is?
Use following info for next questions:
On March 1, 2012 newton company purchased land for an office site by paying $900,000 cash. Began construction on the office building on March 1. The following expenditures were incurred for construction:
March 1, 2012 $600,000
April 1, 2012 $840,000
May 1, 2012 $1,500,000
June 1 2012 $2,400,000
The office was completed and ready for occupancy on July 1 to help pay for construction, $1,200,000 was borrowed one March 1, 2012 when a 9%, three year note payable. Other than the construction note, the only debt outstanding during 2012 was a $500,000, 12%, six-year note payable dated January 1, 2012.
The weighted average accumulated expenditures on the construction project during 2012 were
A) $640,000
B) $4,890,000
C) $520,000
D) $1,160,000
Assume the weighted average accumulated expenditures for the construction project are $870,000. The amount of interest cost to be capitalized during 2012 is
A) $130,500
B) $138,000
C) $150,000
D) $168,000
Dividends are expected to grow-what is the value of stock
: Could I Industries just paid a dividend of $1.92 per share. The dividends are expected to grow at a 19 percent rate for the next 3 years and then level off to a 6 percent growth rate indefinitely. If the required return is 11 percent, what is the val..
|
Distribution of possible returns-standard deviation
: You are going to invest all of your funds in one of three projects with the following distribution of possible returns:
|
Charges an interest rate-what is the effective annual rate
: Big Dom’s Pawn Shop charges an interest rate of 27.6 percent per month on loans to its customers. Like all lenders, Big Dom must report an APR to consumers. What is the effective annual rate?
|
Diversification unavoidable for large institutional investor
: Why is superfluous diversification unavoidable for a large institutional investor? What support does portfolio theory provide for the usefulness of the Beta concept? What do we mean when we say Beta is non-stationary? What is/are the value(s) of Beta..
|
Depreciation expense for using straight-line method
: Huffman corporation construct a building at cost of $20 million. Average accumulated expenditures were $8 million, actual interest was $1,200,000, and avoidable interest was $100,000. If the salvage value is $1,600,000, and it useful life is 40 years..
|
What is the present value of the payment stream
: What is the present value of the following payment stream, discounted at 8% annually; $1000 at the end of year 1, $2000 at the end of year 2, and $3000 at the end of year 3?
|
What are matterhorns total cash receipts for the month
: Matterhorn, Inc. had the following sales for the past six months. Matterhorn collects its credit sales 30% in the month of sale, 60% one month after the sale, and 10% two months after the sale. What are Matterhorn's total cash receipts for the month ..
|
A firm currently has debt-equity ratio
: A firm currently has a debt-equity ratio of 1/2. The debt, which is virtually riskless, pays an interest rate of 7.4%. The expected rate of return on the equity is 13%. What would happen to the expected rate of return on equity if the firm reduced it..
|
What would the rate legally have to be quoted as
: A local finance company quotes an interest rate of 19.5 percent on one-year loans. So, if you borrow $46,000, the interest for the year will be $8,970. Because you must repay a total of $54,970 in one year, the finance company requires you to pay $54..
|