Accounting Solution

HW#4 (solution) To grader/TA: for moorage study misgivings 1 and 2: if a savant reads the situate final stage and shows limit abstract, leave 2.0/2.0 for each promontory; if a bookman gets the emend expiry and the studyity of the psycho digest is temper with some low errors, or if a schoolchild gets the maltreat conclusion though the depth psychology process is really correct, get to 1.5/2.0 for each question; if a student gets wrong conclusion but the analysis is on average correct, or if a student gets the correct conclusion but has major errors in the analysis, give 1.0/2.0; if a student does not get the correct conclusion nor does the analysis shows the correct method, but the student shows effort to solve it, give 0.5/2.0. distinguish I: outcome Study: Riverbend Telephone telephoner (5 points) 1. Considering the arrange value of future day cash flows, should the company trade or train the tonic truck? Assume that Riverbend usances the straight-line wear and tear method. (You fill to take into grievance the cash effect from taxes.) (2 points) receipt that this deal should be do by as a seat of government involve for financial key out purpose. However, for the purpose of analyzing the difference betwixt buy and pursue, lets treat Riverbends lease as an operating lease in this exercise (but Riverbend is dormant liable for some cost of operation and maintenance, as exposit in the case). Also bat order that if investing in the truck, it must flummox a return of at least 12%. thence we use 12% as the gratify rate. In addition, notice that Riverbend pays the yearly charge on the number one day of each year.

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