PPE_Problem_Solution

PPE_Problem_Solution - 0.14 $210,000 Total $6,500,000...

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Q 1 A Land $12,857,143 Building $5,357,143 Depletable Natural Resource (or Silver Mine) $26,785,714 Cash $45,000,000 Q 1 B 1 2001 $204,048 = ($5,357,143-$460,000)*5%*10/12 2002 $244,857 = ($5,357,143-$460,000)*5% Q 1 B 2 2001 $401,786 = $5,357,143 * 5% * 1.8 * 10/12 2002 $445,982 =($5,357,143-$401,786) * 5% * 1.8 Q 1 C Depletion Expense (or Inventory) $4,285,714 = 800,000 @ ($26,785,714/5,000,000 Depletable Natural Resource (or Silver Mine) $4,285,714 Q 2 1 Weighted Average Interest Rate 2001 $2,000,000 0.12 $240,000 (Nonspecific Debt) $3,000,000 0.10 $300,000 Total $5,000,000 $540,000 10.80% 9.90% Weighted Average Interest Rate 2002 $2,000,000 0.12 $240,000 (Nonspecific Debt) $3,000,000 0.10 $300,000 $1,500,000
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Unformatted text preview: 0.14 $210,000 Total $6,500,000 $750,000 11.54% 5.77% Weighted Average Expenditures 2001 $1,600,000 1.00 $1,600,000 0.09 $1,400,000 0.73 $1,018,182 11/12 $1,000,000 0.27 $272,727 0.08 Total $4,000,000 $2,890,909 Specific Debt $1,000,000 8.25% $82,500 Nonspecific Debt $1,890,909 9.90% $187,200 Capitalized Interest $269,700 $269,700 Ending Balance $4,269,700 Weighted Average Expenditures 2002 $4,269,700 1.00 $4,269,700 $2,000,000 0.67 $1,333,333 $1,000,000 0.17 $166,667 Total $7,269,700 $5,769,700 Specific Debt $1,000,000 4.50% $45,000 Nonspecific Debt $4,769,700 5.77% $275,212 Capitalized Interest $320,212 $320,212 Ending Balance $7,589,912...
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