Old water skiing motorboat that is a real gas guzzler

Assignment Help Financial Accounting

Reference no: EM13777500

You own an old water skiing motorboat that is a real gas guzzler. It is 10 years old and can be sold now for $3,000 cash. Assume its market value (MV) in 2 years will be $500. The annual maintenance expenses are expected to be $400 into the foreseeable future, and the boat averages 2 miles per gallon of fuel. Gasoline costs $5.00 per gallon, and the boat will be used for about 200 miles per year. If you sell the old boat, you can buy a newer model boat for $10,000. It will be under a maintenance warranty for 2 years, so this expense is negligible. The newer boat will average 10 miles per gallon of fuel and will have an MV of $7,000 in 2 years. Use a 2-year study period to determine which alternative is preferred. The MARR is 15% per year. State your assumptions.

Reference no: EM13777500

Questions Cloud

Putting human capital on the balance sheet : Putting human capital on the Balance Sheet would violate the:

Journal entries for common stock issued above par value : Prepare journal entries for common stock issued above par value and draw up a Balance Sheet showing how these entries are reflected therein.

Income recognized by nutt-stock basis : During 2004, Houston Nutt, the sole shareholder of a calendar year S corporating, received a distribution of $ 16,000. On December 31, 2003, his stock basis was $ 4,000. the Corporation earned $ 11,000 ordinary income during the year. it has no accum..

Structure the internal audit groups reporting lines : How do many companies structure the internal audit group's reporting lines in order to increase the level of independence? Do you think this is effective? Why or why not?

Old water skiing motorboat that is a real gas guzzler : You own an old water skiing motorboat that is a real gas guzzler. It is 10 years old and can be sold now for $3,000 cash. Assume its market value (MV) in 2 years will be $500. The annual maintenance expenses are expected to be $400 into the foreseeab..

Private sector not-for-profit institution : During 2015 the following transactions were recorded by the Baton Rouge Community Hospital a private sector not-for-profit institution. Gross charges for patient services all charged to Patient Accounts Receivable amounted to 1,700,000.Contractual ad..

Nondepriciable capital asset with a fair market value : Brain owns a 30% profit and loss interest in the MON Partnership. Brain acquired his interest by contributing a nondepriciable capital asset with a fair market value of $ 60,000 and adjusted basis of $24,000. Mariyln acquired her 50% interest by cont..

Provide services under a prearranged fixed amount : For each of the following items, indicate where it would appear in the Statement of Operations for a private not-for-profit hospital: The premium from a capitation agreement, whereby a hospital agrees to provide services under a prearranged fixed amo..

Accounting for private not-for-profit health care entities : With Regard to accounting for private not-for-profit health care entities do the following:

User Account

All Pages