Peavey Enterprises purchased a depreciable asset for 31500 o

Peavey Enterprises purchased a depreciable asset for $31,500 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset\'s salvage value is $3,900, Peavey Enterprises should recognize depreciation expense in Year 2 in the amount of Multiple Choice $7,875.00 $6,900.00 $26,450.00 5 ?

Solution

1) Depreciation expense = (31500-3900)/4 = 6900 per year

So answer is c) $6900

2) Dividend yield = DPS*100/MPS

= 1.25*100/29.75

Dividend yield = 4.2%

So answer is d) 4.2%

3) Book value per share = (938250-33750)/27000 = 33.50

So answer is b) $33.50

4) The amount of contributed capital increase = 69000*5%*24 = 82800

So answer is b) $82800