A = 50,000(A/F,15%,4)
Find F in year 5, subtract future worth of $42,000, and then use A/F factor.
F = 74,000(F/A,10%,5) 42,000(F/P,10%,4)
= 74,000(6.1051) 42,000(1.4641)
A = 390,285(A/F,10%,4)
Lesson 10 Notes
A continuous random variable has a probability of zero of assuming exactly any of its
In dealing with continuous variables, f(x) is usually called the probability density
function (PDF), or simply the density function of X.
Lesson 9 Notes Random variable: a function mapping outcomes from the sample space (S) of an experiment to the real line. Assigns a numerical value to the set of outcomes X denotes a random variable (upper case) x denotes one of its values. (lower case) Co
Lesson 8 Notes
Depreciation & Economic Life
Determined by the period of time the asset will provide the lowest cost of service
compared to other alternatives
Recommends replacing the asset if the cost of service begins to increase due to
Lesson 7 Notes Methods of Depreceation 1. Straight Line Method 2. Sum-of-Years Method 3. Decline Balance Methods 4. Unit-of-Output Method 5. Modified Accelerated Cost Recovery System Annual Depreciation sl = First Cost Salvage Value = P S Life Where P = T
Lesson 6 Notes Criteria for Capitalizing and Expensing 1. Life of the expenditure 2. Value of the expenditure 3. Matching Considerations 4. Accounting Conventions 5. Special situations Depreciation entries in the Accounting Equation are made to reduce the
Lesson 5 Notes Financial Responsibilities Engineers, managers, and technical personnel in the organization often have financial responsibilities for: Equipment Buildings Inventory R & D, etc. Impact on the Accounting Equation 1. Timing, matching, and capi
Lesson 4 Notes Operating activities + Cash collection - Cash paid = Net cash increase (decrease) from operating activities (1) Investing activities - Purchases of securities or property + Sales of securities or property = Net cash increase (decrease) from
Lesson 3 Notes
The name, balance sheet, is derived from the fact that these accounts must always be in
balance. Assets must always equal the sum of liabilities and owners equity.
Assets are economic resources that are expected to produce economic benefi
Lesson 1 Notes 1. In 1934 the U.S. Congress created the SEC, which was commissioned to implement and enforce the Securities Act of 1933 and the Securities Exchange Act of 1934, both responses to the stock market crash in 1929. Among other things these act