Answer:
The amount Laramie should record the purchase of land is <u>$6.2 million</u>.
Explanation:
The costs of a fixed asset refer to the purchase price and other relevant costs which are incurred in order to the location and working condition required to operate the fixed asset in way that it is intended.
The other relevant costs that are added to the purchase price to arrive at the cost of the fixed assets include professional fees, non-refundable taxes or levies, and among others.
If any trade discount or rebate is given, this will be deducted from the purchase price to arrive at the cost.
Any interest required to be paid on the delayed payment in order to reflects the time value of money are not part of the cost of the asset but expensed in the year they are incurred.
From the question, the land acquired is a fixed asset. Based on the explanation above, the total cost of the asset is $6.2 million. The interest from the 6% interest rate on the remaining $5 million will be part of the cost of the land but it will be expensed in the year they are incurred.
Therefore, the amount Laramie should record the purchase of land is <u>$6.2 million</u>.
Buying the beneficiary position on a life insurance policy of someone who is dying is referred to as <u>Viatical Settlement</u>
Explanation:
- <u>Viatical settlement</u> refers to the sale of a life insurance policy by the owner to a third party for a amount which is more than its surrender value but less than its net death benefit.
- Viatical settlement provides the policy owner with a lump some amount of money.
- The <u>viatical settlement </u>is tax-free as per the Health Insurance Portability and Accountability Act (HIPAA) 1996
Answer:
0.2 or 20%
Explanation:
The three possible outcomes, with respective probabilities and returns, as follows
Outcome 1: Probability (P) = 0.35, Return (R) = 0.20
Outcome 2: Probability = 0.25, Return = 0.36
Outcome 3: Probability = 0.40, Return = 0.10.
The expected return will be computed as follows.
Expected Return =
= (0.35*0.20) + (0.25*0.36) + (0.40*0.10)
= 0.07 + 0.09 + 0.04
= 0.2
Therefore expected return = 0.2 or 20%
Answer:
A.)
Retail division = 21.95%
Commercial division = 19%
Internet division = 26%
B.) INTERNET DIVISION HAS THE HAS THE HIGHEST RETURN ON INVESTMENT.
Explanation:
- - - - - - - - - - - - operating - - - - - - invested
Retail - - - - - - - 180,000 - - - - - - - 820,000
Commercial - - 81,700 - - - - - - - - 430,000
Internet - - - - - 83,200 - - - - - - - - 320,000
A.)
return on investment ;
Operating income ÷ invested asset
Retail division (180,000 ÷ 820,000) × 100 = 21.95%
Commercial division (81700 ÷ 430000) × 100 = 19%
Internet division (83200 ÷ 320000) × 100 = 26%
B.) Interest division has the most residual income.