A building was purchased 5 years ago for 1,000000$ depreciated straight line to 100000$ (land value) over
Question:
A building was purchased 5 years ago for 1,000000$ depreciated straight line to 100000$ (land value) over 30 years. its now worth 600000$ (including 100000$ land). the project requires improvement to the building of 200,000$. the improvement are depreciated straight line to zero over the life of the project. the project wil generate revenues of 325000$, 350000$, 375000$ and 400000$ for years 1-4.. Annual cahs operating expenses are 180000$, 200000$,220000$ and 240000$. the project will last 4 years at which time the building will be sold for 800000$. taxes are 40% and rate fo return is 10%.
what is the total depreciation per year? show projected income statement? what is the initial cost? what is the begining and ending book value?
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen