10. Which of the following is the formula for the Fixed Assets to net Worth Rati

Question

10. Which of the following is the formula for the Fixed Assets to net Worth Ratio? a. FA/NW-CURRENT ASSETS/NET WORTHs b. FA/NW-NET FIXED ASSETS/NETWORTH. d. e. c. FA/NW ASSETS/NET WORTH FA/NW-NONCURRENT ASSETS/NET WORTH. None of the above. Short answer 1. Using MACRS, how many years does it take to depreciate a piece of equipment with a 5 year estimated useful life? 2. A piece of equipment has a purchase price of $10,000, a salvage value of $1,000 and an estimated useful life of 7 years. Using Section 179 deduction, how much depreciation is taken in the 1st year? Page 2 of 4

Explanation / Answer

Answer =1

Fixed Assets to Net Worth Ratio = NEt fixed Assets / Net Worth

Answer = Option 2

Answer = 2

Using MACRS 5 years estimated useful life have the six year depreciation.

Answer = 6 Years

Answer =3

Section: 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment Purchased during the tax year. Means the full amount will be allowed for depreciation.

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