Question Completion Status:QUESTION 2George buys a car on April 3 for $25,000. George estimates it has a life expectancy of 10 years with a residual value of $5,000. Using straight line depreciation, what will be the depreciation after thefirst year?O $5,000O $2,000O $2,500$1,500QUESTION 3A pair of twins were given $20,000 on their birthday in 2020. One twin purchased a car for $20,000 with a expected life of 7 years and residual value of $3,000. The other twin bought one Bitcoin.Assume straight line depreciation. If Bitcoin is now worth $60,000, how much is the difference between the book value of twin 1's car and the twin 2's bitcoin? Hint: $60,000-book value. Assume this isthe end of year two for the car.O $57,571O $44,857$24,857$17,571QUESTION 4Using the MACRS three-year table, how much will a $1,000 cell phone be worth after 2 years (the book value not the depreciation for year 2)?QUESTION 5Based on your answer in question 4, if the cell phone store offered $100 for trade in, should you accept (True) or reject (False) the offer?TrueFalseClick Save and Submit to save and submit. Click Save All Answers to save all answers.OO

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Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Steve Fillmore's lifelong dream is to own his own fishing boat to use in his retirement. Steve has recently come into an inheritance of $421,000. He estimates that the boat he wants will cost $344,700 when he retires in 6 years. Click here to view factor tables How much of his inheritance must he invest at an annual rate of 15% (compounded annually) to buy the boat at retirement? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 458,581.) Investment amount $ 149182
Henry Fillmore’s lifelong dream is to own his own fishing boat to use in his retirement. Henry has recently come into an inheritance of $418,500. He estimates that the boat he wants will cost $344,000 when he retires in 7 years. How much of his inheritance must he invest at an annual rate of 5% (compounded annually) to buy the boat at retirement?
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