Below you are given the annual return on Berkshire Hathaway stock for the past 5 years 2016
Question:
Below you are given the annual return on Berkshire Hathaway stock for the past 5 years
2016 23.4%
2017 21.9%
2018 2.8%
2019 11.0%
2020 2.4%
Given this data, calculate the Arithmetic and Geometric Mean returns for this five-year period. Show your work.
Arithmetic Mean = _________________
Geometric Mean = _________________
(b) You purchase a piece of capital equipment for $100,000 and a projected salvage value of $10,000 at the end of its 5-year useful like (and this concurs with the MACRS schedule). Show your work.
What would be the book value of the capital after year 3 under a straight-line depreciation schedule?
BV = _______________________________
What would be the book value of the capital after year 3 under a MACRS depreciation schedule?
BV = ______________________________
Financial Management Theory and Practice
ISBN: 978-0176517304
2nd Canadian edition
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason