C) the firm Will as3030 D) the firm will assess both PPE and FLI assets as indiv

Question

C) the firm Will as3030 D) the firm will assess both PPE and FLI assets as individual assets or in asset groups 72) At the beginning of 2017, Denero Company issued 10-year bonds with a face value of $4,000,000 due on December 31, 2027. The company will accumulate a fund to retire these bonds at maturity. It will make ten annual deposits to the fund beginning on December 31, 2017. How much must Denero deposit each year to achieve this investment goal, assuming that it will earn 12% interest compounded annually? A) $203,515 B) $226,009 C) $227,937 D) $363,636 73) Which of the following is not a major characteristic of a fixed asset? A) acquired for resale B) tangible in nature C) expected to be used for more than one year D) used in the production and sale of other assets Anakwe-Intermediate I, Fall 2017 Final Exam 18 | P

Explanation / Answer

72) We have
Future value = $4000000
N= 10 years
INterest rate = 12%
Annual deposits to be made every year = Future value/(1+r)n
= $4000000/(1.12)10
= $227937
Option C

73) Fixed assets must
a) Be tangible in nature
b) Expected to be used for long term
c) Must be used in the production and sale of other goods/services/assets

So, the only characterstic which csnnot be attributed to fixed assets is that "it is acquired for resale"
Assets which are acquired for resale are trading goods/asets and not fixed assets
So, the answer is Option A

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