Joanne rents a single-family house for one year starting September 1 . If the house burns down, the common law requires:
a. payment of rent only prior to the destruction.
b. payment to be suspended until the house is repaired.
c. payments to terminate.
d. payment to continue for the entire year.
d
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In a statement of cash flows using the indirect method, which of the following events would not be classified as an operating activity?
A) a gain from sale of equipment B) ?the receipt of a cash dividend C) proceeds from the issuance of bonds D) interest expense paid on a loan
The most common form of advertainment is product placement
Indicate whether the statement is true or false
Research has shown that job applicants who participate in computer interviews
a. are more likely to respond dishonestly than when face to face. b. feel less need to give socially acceptable answers. c. prefer human interviews. d. are more likely to be asked illegal questions.
Dr. Magneto is evaluating whether to open a private MRI clinic in leased office space in a local strip mall. The clinic will run for two years and then close. Before the clinic opens, the offices require $200,000 of renovations
Dr. Magneto will buy $20,000 of computer equipment and one MRI machine. The MRI machine (GE 3.0T Signa Excite HD) costs $2.4M. Assume that the renovations, computer equipment and MRI are paid for at the beginning of the first year (t=0 ) and that all three are classified as 15-year property. Assume that the MRI machine will be sold for $500,000 at the end of the second year of business. The computer equipment will be worthless at that time. The clinic can perform 72 scans per week for 49 operational weeks per year. The clinic will charge $600 per scan. The clinic will need two technicians, two receptionists and one office manager. Wages, salaries and other payroll costs (i.e., health insurance premiums) will total $275,000 per year. Maintenance, supplies, marketing and operating costs for the machine are expected to be $200,000 per year. Annual rent is $60,000 payable at the end of each year. Assume that all revenues (and expenses) occur at the end of the year and that they grow at a rate of 2.5%. The tax rate is 40% and Dr. Magneto's cost of capital is 10%. What is the NPV for the proposed acquisition if the cost of capital is 10%? MACRS Depreciation Rates Year 10-Year 15-Year 1 10.00% 5.00% 2 18.00% 9.50% 3 14.40% 8.55% A) -$410,087 B) $55,807 C) $165,153 D) $169,483 E) $312,062