A machine worth 800,000 is brought from china, freight charges amount to 200,000. If the scrap value of the machine is 50,000 that occurs at the end of 17 years.

Q: Define the term declining-balance?

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…

Q: What are two ways to calculate returns for a holding period?

A: It is also called as HPR, which states to the total returns during a period for which a investment…

Q: WHAT IS THE VALUE OF DISCOUNTED FLOWS

A: As per Time value of money, there are present values as well as future values.

Q: All of the following items would appear on the balance sheet except Select one: O a. current…

A: A balance sheet is one type of financial document that shows a company's financial situation as of a…

Q: Describe the Declining-Balance Method with examples?

A:

Q: Explain price/cash flow ratio

A: Answer: Price to cash flow is determined through the division of price per share by cash flow per…

Q: a. Calculate the return on investment. (Round your answer to 2 decimal places.) Return on Investment…

A: Return on Investment: It is a measure of performance and profitability that is applied to evaluate…

Q: What does liquidity mean?

A: Liquidity:

Q: Liquid ratio formula?

A: Ratio analysis is referred as the quantitative method of understanding company’s liquidity,…

Q: Define increase or decrease of credits.

A: Definition:   Account: Account is the basic record that reports all changes in the value of…

Q: Why is the declining-balance method most widely used?

A: Double-declining-balance method: The depreciation method which assumes that the consumption of…

Q: Distinguish between Order of Liquidity and Order of Permanence.

A: The financial statements of a firm is presented in order to assess the performance and position of…

Q: Define Liquidity Analysis?

A: Liquidity analysis is very essential as it shows the ability of the firm in paying short-term bills.…

Q: What is an acquisition differential and where does it appear in the balance sheet?

A: INTRODUCTION: A balance sheet is a financial statement that shows the assets and liabilities of a…

Q: What are the different liquidity tools?

A: Liquid assets are those assets which are either in cash form or can be converted into cash into…

Q: Question. What are Operating and non-operating expence?

A: Expenses refer to the outflow of money for the payment of any product or service used in the course…

Q: Define the term daily-balance approach?

A: The consideration of interest for a particular amount invested for a particular period is the…

Q: ompare and contrast Liquidity ratio and solvency rati

A: Analysis of the company's financial statements, such as the balance sheet and income statement, can…

Q: What is the difference between g Operating Margin and Net Margin?

A:

Q: g balance method of C

A: The formula of declining balance method as, Depreciation per annum as, = (Net Book Value - Residual…

Q: Define adjusted present value approach (APV)

A: Introduction Adjusted present value is a valuation method introduced in 1974 by Stewart Myers.…

Q: Give an example assuming that  the Compounding Period equals to Payment Period?

A: The representation on the basis of assumption:

Q: Using the adjusted present value model, under what assumptionsare the compressed APV results…

A: npv is the sum of the pv of all future cashflows less sum of the pv os all cash flows associated…

Q: Why is liquidity ratio important?

A: Liquidity is how easily cash is available on hand. Liquidity ratio is defined as a ratio that is…

Q: What is a mathematical term that is on display when using the fractional reserve?

A: Fractional reserve banking is defined as the system, where the fraction of the bank deposits that…

Q: How should changes in the estimated unguaranteedresidual value be handled by the lessor?

A:

Q: How does measure liquidity?

A: The transactions of the company will be analyzed by the management, and it will be recorded in…

Q: What is liquidity?

A: Cash is said to be the most liquid asset of the business. Assets are said to be highly liquid if…

Q: Define residual value.

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…

Q: Explain Amortised cost and how to calculate it.

A: Amortized cost refers to the cost that helps to allocate the cost of financial/intangible assets…

Q: The depletion expense is

A: Depletion: It refers to the process of proportionately distributing the cost of the extracting…

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.