You are considering starting a company that manufactures racing bicycles. You are planning on financing your firm 40% equity and 60% debt. You estimate that your upfront costs will be $5M, and that you will earn an EBIT of $1M per year for the next 12 years. Lightning Bolt Bikes makes racing bicycles similar to the ones that you wish to manufacture. They have a CAPM equity beta of 1.9 and a debt to equity ratio of 0.7. The tax rate for both firms is 35%, the riskless rate is 3%, and the expected return on the S&P500 is 15%. Cost of Debt is 6%

Part A (5 points). What is the asset beta of Lightning Bolt Bikes?

Part B (5 points). What is your unlevered cost of equity?

Part C (5 points). What is your firm’s equity beta?

Part D (10 points). What is your firm’s weighted average cost of capital?

Part E (5 points). What is the NPV of your proposed bicycle company using the WACC method?

Explanation:

at price ceiling we have price set at a maximum level. it cannot be raised beyond this level. At binding price ceiling, price would be set to be lower than what is the equilibrium price level.  a non binding price ceiling is set to be higher than equilibrium level.

At price floor, price is set to a particular minimum level.  It cannot fall lower than this. At binding price floor, price is higher than equilibrium price' at non binding price floor, it is set to be lower than equilibrium price level.

this expalnation should help us to answer this question.

(a) Many teenagers would like to work but minimum wage is set at 25.00 we have Price floor, Binding

(b) Government instituted legal minimum price of a gallon of milk at $2.30 we have Price floor, Non-binding

(c) if the Government prohibits from selling milk for more than $2.30 per gallon then we have Price ceiling, Binding

Answer:

Please see attached for the detailed solution.

Explanation:

a. Prepare Journal

b. Prepare statement

c. Prepare balance sheet

Please find attached solution to the above questions.

Answer:

d. Experiment 1 has a confounding variable related to the mass of the rockets. Any variation in mass may cause a discrepancy in the distance traveled.

Explanation:

Both experiments have confounding variables.  But the reasons given for the occurrence of the confounder in experiment 2 do not justify (c) and (e) as correct answers.  By definition, confounders are factors other than the independent variable that cause differences in outcome.  For experiment 1, the different masses of the two rockets affect the independent variable (fuel mixture) being studied, and actually cause the discrepancy in the distance traveled as indicated in answer (d).  Other examples of confounders are placebo, weather, age, and experimenter bias which a double-blind can eliminate.

Answer and Explanation:

The preparation of the statement of cash flows is presented below:

Bluebonnet Bakers

Cash flow statement

For the year 2021

Cash flow from operating activities

Collections from customers $490,000

Interest on notes receivable 11,500

Less: Interest on notes payable 7,500

Less: Purchase of inventory 235,000

Less: Salaries to employees 95,000

Net cash flow from operating activities $164,000

Cash flow from investing activities

Collection of notes receivable 54,000

Sale of investments 34,000

Less: Purchase of equipment 90,000

Net cash flow from investing activities -$2,000

Cash flow from financing activities

Issuance of notes payable 175,000

Less: Payment of notes payable 40,000

Less: Dividends to shareholders 35,000

Net cash flow from financing activities $100,000

Net increase or decrease in cash $262,000

Add: Opening cash balance $26,000

Ending cash balance $288,000

Answer:

Explanation:

The Financial system is very important because it helps grow the economy of the country. They do this by creating capital when they transfer funds from those who have it (savers) to those who need it (borrowers). These borrowers will then use it to invest in projects that will grow the economy.

The Financial system also works to manage and mitigate risk because they have experience in such areas and are able to discern which projects to go after to avoid or properly manage risk.

Answer:

5.025%

Explanation:

When we assume that the pure expectations theory is correct, then we are assuming that there is no risk premium involved. The formula to determine the yield for the 2 year treasury security:

(1 + i)² = (1 + 4.85%) x (1 + 5.2%)

(1 + i)² = 1.0485 x 1.052

(1 + i)² = 1.103022

√(1 + i)² = √1.103022

1 + i = 1.050248542

i = 0.050248542 = 5.025%

Answer:

Jan 1st, 2021 entry:

Equipment    746,168 debit

    Lease Liability    723,668 credit

    Cash                     22,500 credit

April 1st, 2021 entry:

Interest expense    7,537 debit

Lease Liability       15,263 debit

         Cash              22,800 credit

Explanation:

We will assume a 750,000 sales revenue per quarter. As this was their historical and expected value:

750,000 x 3% = 22,500 per quarter

Now, we solve for the present value of the lease payment:

[tex]C \times \frac{1-(1+r)^{-time} }{rate}(1+r) = PV\\[/tex]

C 22,500

time 40 (10 years x 4 quarter per year)

rate 0.01 (4% annual / 4 quarters)

[tex]22500 \times \frac{1-(1+0.01)^{-40} }{0.01}(1+0.01) = PV\\[/tex]

PV $746,168.2419

we subtract the first payment of 22,500

lease liability reocrded in the enrty: 723.668

As lease sales were 760,000

lease payment: 760,000 x 3% = 22,800

less expected of 22,500 = 300 additional interest expense

interest expense: 723,668 x 0.01 = 7,237 + 300 = 7,537

amortization on lease liability: 22,800 -7,537 = 15,263

Answer:

Explanation below

Explanation:

Outsourcing simply involves the act of contracting our certain business activities and processes to third-party providers.  

Staff

When you outsource your staff, you can be able to save cots and use the freed capital for other things but the disadvantage would certainly be around the issue of confidentiality of business information.  

When you outsource computer servers, software licensing, and data storage, you would gain access to world-class capabilities because the third-party providers would likely provide them to meet their customers.  

There would also be shared risks as part of the benefits. The disadvantages could include loss of control. People who discourage outsourcing of these functions are of the opinion that third-party vendor cannot be able to match the level of responsiveness and levels of services that could be offered by an in-house team

Answer:

539,000.00  

Explanation:

As per the contribution margin analysis concept, the break-even point is obtained by dividing fixed cost by contribution margin per unit.

For Etuck327,

The selling price is $39

Variable expense is $28

Break-even in units is 49,000 books.

Contribution margin per unit = selling price - variable costs

=$39- $28

=$11

if Break-even = fixed cost/ contribution margin per unit, then

49,000= fixed cost / 11

fixed costs = 11 x 49000

Fixed costs = 539,000.00    

Answer:

Babcock Company

Journal Entries:

Nov. 3:

Debit Inventory $63,750

Credit Accounts Payable (Moonlight Co.) $63,750

To record the purchase of goods on account, terms FOB destination, 2/10, n/30.

Nov. 4:

Debit Cash Account $37,680

Credit Sales Revenue $37,680

To record the sale of goods for cash.

Debit Cost of goods sold $22,600

Credit Inventory $22,600

To record the cost of goods sold.

Nov. 5:

Debit Inventory $47,500

Credit Cash (For prepaid freight) $810

Credit Accounts Payable (Papoose Creek Co.) $46,690

To record the purchase of goods on account, terms FOB Shipping point, 2/10, n.30.

Nov. 6:

Debit Accounts Payable (Moonlight Co.) $13,500

Credit Inventory $13,500

To record the return of goods to Moonlight Co.

Nov. 8:

Debit Accounts Receivable (Quinn Co.) $15,600

Credit Sales Revenue $15,600

To record the sale of goods on account, terms n/15.

Debit Cost of goods sold $9,400

Credit Inventory $9,400

To record the cost of goods sold.

Nov. 13:

Debit Accounts Payable (Moonlight Co.) $50,250

Credit Cash Discount $1,005

Credit Cash Account $49,245

To record the payment for goods on account

Nov. 14:

Debit VISA Account $236,000

Credit Sales Revenue $236,000

To record the sale of goods on VISA.

Debit Cost of goods sold $140,000

Credit Inventory $140,000

To record the cost of goods sold.

Nov. 15:

Debit Accounts Payable (Papoose Creek Co.) $46,690

Credit Cash Discount $9,338

Credit Cash Account $37,353

To record the payment on account.

Nov. 23:

Debit Cash Account $15,600

Credit Accounts Receivable (Quinn Co.) $15,600

To record the receipt of cash on account.

Nov. 24:

Debit Accounts Receivable (Rable Co.) $56,900

Credit Sales Revenue $56,900

To record the sale of goods on account, terms 1/10, n/30.

Debit Cost of goods sold $34,000

Credit Inventory $34,000

To record the cost of goods sold.

Nov. 28:

Debit VISA Service Fee Expense $3,540

Credit Cash Account $3,540

To record the payment for VISA service.

Nov. 30:

Debit Inventory $3,300

Credit Cost of goods sold $3,300

To record the return of goods.

Debit Sales Returns $6,000

Credit Accounts Receivable $6,000

To record the return of goods by Quinn Co.

Debit Accounts Receivable $6,000

Credit Cash Account $6,000

To record the refund for returned goods.

Explanation:

Babcock Company uses Journals to record business transactions as they occur on a daily basis.  They provide the needed guidance to ensure that the accounts involved in every business transaction are properly identified and entries are correctly recorded on the correct side of the accounts.  Transactions are recorded following the ubiquitous accounting equation, the accrual concept, and matching principle of generally accepted accounting principles.

Answer:

Nominal GDP in year 1 = $6

Nominal GDP in year 2 = $20

Nominal GDP in year 3 =  $42

Real GDP in year 1 = $6

Real GDP in year 2 = $10

Real GDP in year 3 =  $14

GDP deflator in year 1 = 100

GDP deflator in year 2 = 200

GDP deflator in year 3 = 300

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Nominal GDP is GDP calculated using current year prices while Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation.

Nominal GDP = quantity produced x current year price

Nominal GDP in year 1 = (3 x $2) = $6

Nominal GDP in year 2 = 5 x $4 = $20

Nominal GDP in year 3 = 7 x $6 = $42

Real GDP = quantity produced x base year price

Real GDP in year 1 = (3 x $2) = $6

Real GDP in year 2 = 5 x $2 = $10

Real GDP in year 3 = 7 x $2 = $14

GDP deflator = nominal GDP / Real GDP x 100

GDP deflator in year 1 = $6 / $6 x 100 = 100

GDP deflator in year 2 = $20 / $10 x 100= 200

GDP deflator in year 3 = $42 / 14 x 100 = 300

Answer:

The requirements are missing, so I looked for a similar question. This is a financial lease since the PV of the lease payments represents 97% of the asset's value.

January 1, 2021, equipment leased from Deal leasing

Dr Right of use asset 405,541.20

    Cr Lease liability 405,541.20

the right of use asset = PV of lease payments = $60,000 x 6.75902 (PV annuity due, 10%, 10 periods) = $405,541.20

January 1, 2021, first lease payment

Dr Lease liability 60,000

    Cr Cash 60,000

December 31, 2021, depreciation expense on leased asset

Dr Depreciation expense 40,554.12

    Cr Accumulated depreciation 40,554.12

depreciation expense = $405,541.20 / 10 = $40,554.12

December 31, 2021, interest expense on asset lease

Dr Interest expense 34,554.12

    Cr Interest payable 34,554.12

interest expense = ($405,541.20 - $60,000) x 10% = $34,554.12  

Answer:

$7,900

Explanation:

Calculation for the annual after-tax cost

Additional salary = $ 10,000

Marginal tax rate=21%

First step is to find the income tax benefit

Income tax benefit = $ 10,000 x 21%

Income tax benefit= $ 2,100

Second step is to find the Annual after tax cost of additional salary

Annual after tax cost of additional salary = $ 10,000 - $2,100

Annual after tax cost of additional salary = $7,900

Therefore the annual after-tax cost will be $7,900

Answer:

True Cash Balance $7,688

Explanation:

The computation of the true cash balance is shown below:

Unadjusted Cash Balance as of May 31 $7,176

Add: Interest Earned   $14

Note Collected by Bank $600

Less: NSF check ($67)

Less Bank charges ($35)

True Cash Balance $7,688

Hence, the true cash balance is $7,688 and the same is to be considered

Answer:

a. Current Ratio  = current assets / current liabilities = 190,000 / 153,000 = 1.24

b. Acid-test ratio  = (current assets - inventory) / current liabilities = (190,000 - 50,000) / 153,000 = 0.92

c. Times interest earned  = EBIT / interest expense = 65,000 / 8,000 = 8.13

d. Inventory turnover  = COGS / inventory = 90,000 / 50,000 = 1.8

e. Total asset turnover  = net sales / total assets = 210,000 / 525,000 = 0.4

f. Operating profit margin  = operating income / total sales = 65,000 / 210,000 = 0.31

g. Days in receivables  = (accounts receivables / total sales) x 365 = (30,000 / 210,000) x 365 =  52.14 days

h. Operating return on assets  = operating income / total assets = 65,000 / 525,000 = 0.12

i. Debt ratio  = total liabilities / total assets = 273,000 / 525,000 = 0.52

j. Fixed asset turnover  = total sales / fixed assets = 210,000 / 335,000 = 0.63

k. Return on equity = net income / total equity = 45,030 / 252,000 = 0.18

Answer:

$632,000

Explanation:

The computation of the amount of balance in the right of use asset after two years is shown below:

Balance in right of use asset after 2 years is

= Recorded value - ((Recorded value × rate of interest) × number of years)

= $790,000 - (($790,000 × 10%) × 2)

= $790,000 - ($79,000 × 2)

= $790,000 - $158,000

= $632,000

hence, the balance is $632,000

Answer:

a. $13,000

Explanation:

Calculation for what royalty revenue should be

First step is to find the estimated amount for the second half of the year

Royalties for the second half =

15%*$30,000

Royalties for the second half= $4,500

Now let Compute for the total royalty revenue

Total royalty revenue for 20X5=$8,500+$4,500

Total royalty revenue for 20X5=$13,000

Therefore the royalty revenue should be $13,000

Answer:

Since the total future worth of running an electric line of $19,353.42 is less than the total future worth of solar cells is $24,132.22, it implies that it will be cheaper to run an electric line than to use solar cells. Therefore, running an electric line should be selected.

Explanation:

The future worth analysis refers to an act of determining what the the worth of present amount of money or stream of money invested at an interest rate will after in some period or years to come.

To determine which one to select between solar cells and running an electric line, the we need to calculate the future worth of both and compared as follows:

a. Calculation of future value of solar cells

Calculation of future worth of $12,600 installation cost

FW of $12,600 = PW of $12,600 * (1 + r)^n ................ (1)

Where;

FW of $12,600 = Future worth of $12,600 installation cost = ?

PW of $12,600 = Present worth of $12,600 installation cost = $12,600

r = interest rate = 10%, or 0.10

n = number of years = 4

Substitute the values into equation (1), we have:

FW of $12,600 = $12,600 * (1 + 0.10)^4

FW of $12,600 = $12,600 * 1.4641

FW of $12,600 = $18,447.66

Calculation of future worth of annual costs for inspection, cleaning, etc. of $1,400

The future worth of annual costs for inspection, cleaning, etc. of $1,400 can also be calculated using the formula for calculating the Future Value (FV) of an Ordinary Annuity as follows:

FW of $1,400 = M * (((1 + r)^n - 1) / r) ................................. (2)

Where,

FW of $1,400 = Future value of Annual costs for inspection, cleaning, etc. of $1,400 =?

M = Annual costs for inspection, cleaning, etc. = $1,400

r = interest rate = 10%, or 0.10

n = number of years = 4

Substitute the values into equation (2), we have:

FW of $1,400 = $1,400 * (((1 + 0.01)^4 - 1) / 0.01)

FW of $1,400 = $1,400 * 4.060401

FW of $1,400 = $5,684.56

Calculation of total future worth of solar cells

This is calculated by simply adding the FW of $12,600 and FW of $1,400 as follows:

Total future worth of solar cells = FW of $12,600 + FW of $1,400 = $18,447.66 + $5,684.56 = $24,132.22

Therefore, the total future worth of solar cells is $24,132.22.

b. Calculation of future value of running an electric line

Calculation of future worth of $11,000 installation cost

FW of $11,000 = PW of $11,000 * (1 + r)^n ................ (3)

Where;

FW of $11,000 = Future worth of $11,000 installation cost = ?

PW of $11,000 = Present worth of $11,000 installation cost = $11,000

r = interest rate = 10%, or 0.10

n = number of years = 4

Substitute the values into equation (3), we have:

FW of $11,000 = $11,000 * (1 + 0.10)^4

FW of $11,000 = $11,000 * 1.4641

FW of $11,000 = $16,105.10

Calculation of future worth of expected annual power costs of $800

The future worth of expected annual power costs of $800 can also be calculated using the formula for calculating the Future Value (FV) of an Ordinary Annuity as follows:

FW of $800 = M * (((1 + r)^n - 1) / r) ................................. (4)

Where,

FW of $800 = Future value of expected annual power costs of $800 =?

M = Expected annual power costs = $800

r = interest rate = 10%, or 0.10

n = number of years = 4

Substitute the values into equation (4), we have:

FW of $800 = $800 * (((1 + 0.01)^4 - 1) / 0.01)

FW of $800 = $800 * 4.060401

FW of $800 = $3,248.32

Calculation of total future worth of running an electric line

This is calculated by simply adding the FW of $11,000 and FW of $800 as follows:

Total future worth of running an electric line = FW of $11,000 + FW of $800 = $16,105.10 + $3,248.32 = $19,353.42

Therefore, the total future worth of running an electric line is $19,353.42.

c. Conclusion

Since the total future worth of running an electric line of $19,353.42 is less than the total future worth of solar cells is $24,132.22, it implies that it will be cheaper to run an electric line than to use solar cells. Therefore, running an electric line should be selected.

Answer:

a. True

Explanation:

This system of performance review is a 360-degree review or feedback process where a given employee receives inputs on her performance (or other criteria such as behaviors, competencies and results achieved) from different employees with varying working relationships and at different levels.  The idea is to ensure that the employee's performance is not partial or biased.  Using this system, the employee who may be a manager will have her performance reviewed by employees below, above, and on the same level with her.

Answer:

the dollar will appreciate by 3% against the euro

Explanation:

long run change in the exchange rate = (growth rate money supply Europe - growth rate money supply US) - (growth rate real GDP Europe - growth rate real GDP US) = (7% -  5%) - (5% - 6%) = 2% - (-1%) = 2% + 1% = 3%

This is a very simplistic approach to the monetary exchange rate model, but since we are given only this information, it's all that we can use.

Answer:

The answer is below

Explanation:

The nominal GDP is the market value of goods within a country adjusted for price change.

Nominal GDP for year 1 = Total market value of goods at current price = 3 bars × $4 = $12

Nominal GDP for year 2 = Total market value of goods at current price = 4 bars × $5 = $20

Nominal GDP for year 3 = Total market value of goods at current price = 5 bars × $6 = $30

The real GDP is the market value of goods within a country at current price.

Real GDP for year 1 = Total market value of goods at base year price = 3 bars × $4 = $12

Real GDP for year 2 = Total market value of goods at base year price = 4 bars × $4 = $16

Real GDP for year 3 = Total market value of goods at base year price = 5 bars × $4 = $20

GDP deflator is the ratio of nominal GDP to real GDP multiplied by 100.

GDP deflator in year 1 = (Nominal GDP in year 1 / Real GDP in year 1) × 100 = ($12/$12) × 100 = 100

GDP deflator in year 2 = (Nominal GDP in year 2 / Real GDP in year 2) × 100 = ($20/$16) × 125 = 100

GDP deflator in year 3 = (Nominal GDP in year 3 / Real GDP in year 3) × 100 = ($30/$20) × 100 = 150

Answer:

1. Stockholders invest $90,000 cash to start the business.

Dr Cash 90,000

    Cr Common stock 90,000

2. Purchased three digital copy machines for $400,000, paying $118,000 cash and signing a 5-year, 6% note for the remainder.

Dr Copy machines 400,000

    Cr Cash 118,000*

    Cr Notes payable 282,000

*Where did they get the extra cash from?

3. Purchased $5,500 paper supplies on credit.

Dr Supplies 5,500

    Cr Accounts payable 5,500

4. Cash received for photocopy services amounted to $8,400.

Dr Cash 8,400

    Cr Service revenue 8,400

5. Paid $500 cash for radio advertising.

Dr Advertising expense 500

    Cr Cash 500

6. Paid $800 on account for paper supplies purchased in transaction 3.

Dr Accounts payable 800

    Cr Cash 800

7. Dividends of $1,600 were paid to stockholders.

Dr Dividends 1,600

    Cr Cash 1,600

8. Paid $1,200 cash for rent for the current month.

Dr Rent expense 1,200

    Cr Cash 1,200

9. Received $2,200 cash advance from a customer for future copying.

Dr Cash 2,200

    Cr Unearned service revenue 2,200

10. Billed a customer for $500 for photocopy services completed.

Dr Accounts receivable 500

    Cr Service revenue 500

Answer:

1. I²1 will have a negative sign

This is because the more work the adults do, the less sleep they will utilize.

2. The sign of i²2 is likely to be negative. This is because due to the demands placed on them, more educated people are likely to sleep less. Also, general as age increases some people sleep less. While some others sleep more as it increases. So i²3 is a bit complicated to judge.

3. Using the data

^sleep = 3638.24-0.148toteork-11.13educ + 2.20age

N = 706 r² = 0.113

We will convert 5 hours to minutes = 60x5 = 300

Coefficient of totwork = 0.148

O.148x300 = 44.4 minutes

In a week approximately 45 minutes of less sleep is not too much a change.

4. We are to discuss the sign and magnitude of estimated education

More education indicates less sleeping time. This is obvious given the sign of the variable educ. It is negative, but it's effect is quite small. Magnitude is -11.13.

So as education increases by 1 year, expected sleeping time decreases by 11.13 minutes weekly.

5. R² is 0.113. the 3 predictor variables gives us 11.3% of total variations in sleep and rest. 88.7% is unexplained.

Some factors that might also affect it are general health, number and age of children are factors that could correlate with totwork

Answer:

                          AXEL CORPORATION

Income Statement For the Year Ended December 31, 2021

Particulars                            Amount           Amount

Sales Revenue                                           $6,60,000

Less : Cost of Goods Sold                         $360,000

Gross Profit                                                 $300,000

Less: Operating Expenses  

Selling Expenses                 $66,000

Administrative Expenses    $86,000        $152,000

Operating Income                                       $148,000

Non- Operating and others

Restructuring cost               -$62,000  

Interest Expenses                -$23,000  

Interest Revenue                $39,000  

Gain on sale of investment  $86,000         $40,000

Net Income before Taxes                            $188,000

Less : Income Tax Expenses                        $47,000  

Net income after Taxes                                $141,000

The Earning Per Shares remains $1.41

Answer:

You have to be intelligent, risk taking and you haver to care about your people.

Explanation:

Answer:

ncvbhrdfh

Explanation:

Answer:

hgfjttfgk,jnhlkgfk,hjlhj

Explanation:

franchise

Explanation:

right granted to an individual or group to the market for a business goods or services within a certain area

Jane is planning to go on a camping trip. The items that Jane has purchased from the supermarket are non durable goods.

The lifespan of consumer nondurable items, which are bought for immediate or nearly immediate consumption, ranges from minutes to three years. These frequently include things like meals, drinks, clothes, shoes, and gasoline.

Non-durable commodities are typically produced, delivered, and sold to consumers quickly.

These products are frequently used very rapidly as well, thus consumers require a constant supply in order to keep stocking up.

Therefore, Jane is planning to go on a camping trip. She purchases a bottle of mineral water, a pack of biscuits, a small tube of toothpaste, and a toothbrush from the supermarket near her house. The items that Jane has purchased from the supermarket are non durable goods.

To know more about the non durable goods, visit:

https://brainly.com/question/28606276

#SPJ2

Answer: Appraisal contingency and Removal.

Explanation:

The appraisal contingency, is a kind of CAR residential purchase agreement, which allows a buyer to back out of the deal if the house appraises for less than the already agreed-upon value. and the loan contingency, this term lets the buyer back out if he/she can't get their loan approved for the said purposes.

The section of a car residential purchase agreement that separates it into three sections would be:

Section 9C

Thus, "section 9C" is the correct answer.

Learn more about "Residential Agreement" here:

brainly.com/question/10539028

Answer:

a.  Straight line method.

Depreciation per annum = ($ 256,800 - $12,000 ) / 8 = $ 30,600.

Depreciation for 2020 = $ 30,600 * ( 3 /12 ) = $ 7,650.

b. Units of output

Depreciation per unit = ( $ 256,800 - $ 12,000 ) / 48,000 = $ 5.1

Depreciation for 2020 = 1,000 * $ 5.1 = $ 5,100.

c. Working hours.

Depreciation per hours = ( $ 256,800 - $ 12,000 ) / 20,400 = $ 12

Depreciation for 2020 = 600 * $ 12 = $ 7,200.

D. Sum of digits method

Sum of years = 8 ( 8 +1 ) / 2 = 36.

Year - 1 used ( 3 / 12 = 0.25)

Year-2 used ( 12 / 12 = 1 )

Remaining ( 8 - 1 - 0.25 = 6.75)

Depreciation for 2022 = ($ 256,800 - $ 12,000 ) * ( 6.75 / 36 )

Depreciation for 2022 = $ 45,900.

e. Double declining balance

Depreciation rate = 200 / 8 = 25 %.

Depreciation for 2020 = $256,800 * 25 % * (3 /12)

Depreciation for 2020 = $16,050.  

Depreciation for 2021 = ( $256,800 - $ 16,050) * 25%

Depreciation for 2021 = $60,188.