what is the fair value?
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Question 1:- Solve below the question.
(A)- masa co is considering purchasing a retail shop in the high street. the market value of the shop is $500,000. transaction costs to aquire the shop would be $45000 spendalot co expects to use the shop for a set period of time and the discounted future
1. 660000
2. 545000
3. 500000
4. 455000
(B) - when should an expenditure be recorded as an asset rather than an expenses?
1. never
2. always
3. if the amount is material.
4. when future exists
Step by step
Solved in 2 steps
- Question1: A company is planning to purchase a new machine to expand the range of its products. There are two brands available in the market: A and B. Both machines are costing 70,000 OMR. The cash inflows given in the table are expected to be generated by both machines. Based on NPV and IPP, identify the better machine if the discounting rate is 7.5% and write aconclusion. Year Machine A Machine B 1 12000 13100 2 14200 13900 3 16100 15800 4 19000 18600 5 21700 20000 6 22200 22800Accounting QuestionAn ongoing business should be able to produce cash flows as listed below. It's offered for sale at a price of $1.5 million, and most interested buyers understand the current owner will unlikely accept anything less. If an appropriate opportunity cost of money is 9.0%, what is the value of this business for anyone who buys today from the owner? • Year 1 - $305,000 Year 2 $327,000 ● ● ● ● Year 3- $348,500 Year 4- $385,000 Year 5 - $422,000
- 22. John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $840,000. John has used past financial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)What is the break-even probability in the following case? A customer wishes to purchase a $2,000 item that has been marked up to 50% over cost. Assume all cash flows are discounted to present value and there is no chance of subsequent sales. a. 55.67% b. 77.67% c. 66.67% d. 88.67%A company is planning to expand its business which is costing OMR 80000. The following cash inflows are expected to come. Calculate Profitability index for the machine given the rate of discounting to be 5.005% 1 Machine A Years Lia 15000 1 23000 42500 3 52300 4 اختراحد الخيارات a. 1.50 b. 0.23 C. None of the options d. 1.34 e. 254 اجل اختماري
- The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then sold the cars after three years of use. The company's present fleet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives: Purchase alternative: The company can purchase the cars, as in the past, and sell the cars after three years of use. Ten cars will be needed, which can be purchased at a discounted price of $15,000 each. If this alternative is accepted, the following costs will be incurred on the fleet as a whole: 2$ Annual cost of servicing, taxes, and licensing Repairs, first year Repairs, second year Repairs, third year 5,500 2$ 3,400 2$ 5,900 2$ 7,900 At the end of three years, the fleet could be sold for one-half of the original purchase price. Lease alternative: The company can lease the cars under a three-year lease contract. The lease cost would be $74,000 per…Given the attached information, which of the answers below would be correct?: a. A would lend, consume 0 today and $105,000 next year b. G would borrow, consume $112,037 today and 0 next year c. A would lend, consume 0 today and $111,000 next year d. G would borrow, consume $105,714 today and 0 next year e. G would borrow, consume $111,111 today and 0 next yearb) Sale price of the car = S 23800 DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT c) If the dealership you are buying the car from is offering 6.3% interest on a 5 year loan, what will your monthly payment be? Remember to use the sale price from Part b above. Monthly payment = S DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT. Round your answer to 2 decimal places as needed. d) How much would you actually pay for the car over 5 years? Total amount paid for car = $ DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT. Round your answer to 2 decimal places as needed. e) How much interest would you pay over 5 years? Amount of interest =S DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT. Round your answer to 2 decimal places as needed. f) What would the monthly payment be if you pay the car off over 6 years with the same interest rate? Monthly payment = S DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT. Round your answer to 2 decimal places as needed. g) How…
- Problem: Yuseff was able to sell a car whose suggested retail price is $1,2000.000. The vehicle will be financed through a bank. The required down payment was $120,000.00 and the monthly amortization for 6 years will be 22,000.00. The car dealer gave 4% commission rate. Questions: 1. What percent of retail price is the down payment? 2. How much was the gross balance or the amount to be financed by the bank?Using the attached exhibit and the information below, what is the net cost of purchasing this vehicle?To answer the question, use the following assumptions:● The price of the car is $20,000.● The down payment required is $2,000● The security deposit required is $500● The sales tax rate is 10.25%%. Round to the nearest cent. DO NOT INCLUDE COMMAS OR $.● GAP insurance on the lease is $300��� Interest lost or foregone is computed using a 4% after tax rate of return (use in Step 4)● The interest rate on the lease and loan is 9% (use in Step 6).● The lease and loan terms are both 36 months.● Your resale/trade-in value for your vehicle is $6,000● Disposition fee: $250● Lease Payment: $325/ month● Purchase Payment: $360/monthD. Discuss the payback method and what the payback periods of the old backhoes and new backhoes reveal about whether the company should purchase new backhoes or continue using the old backhoes. Calculate the profitability index for keeping the old backhoes and purchasing new backhoes. The following information is available to use in deciding whether to purchase the new backhoes or old backhoes. Using the 8% Present Value of an Annuity of 1. Old Backhoes New Backhoes Purchase cost when new $90,000 $200,000 Salvage value now $42,000 Investment in major overhaul needed in next year $55,000 Salvage value in 8 years $15,000 $90,000 Remaining life 8 years 8 years Net cash flow generated each year $30,425 $43,900 Answer that Bartebly provided is down below. My Questions is: Can you display what Pv factor you used to get the a present value calculations. can you leave the the present value calculations to 6 digits.…