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Author Question: Cantanna Inc, is developing a pro forma income statement for the coming year. The chief financial ... (Read 51 times)

littleanan

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on: Jul 11, 2018
Cantanna Inc, is developing a pro forma income statement for the coming year. The chief financial officer estimates that fixed assets are 70,000,000 and that sales will be 300,000,000.
 
  If depreciation is historically 20 of fixed assets, what is the expected amount of depreciation for the upcoming year (in dollars)?
  A) 14,000,000
  B) 20,000,000
  C) 60,000,000
  D) This figure cannot be reasonably estimated.

Question 2

If the future value of an annuity is known, then the present value of the annuity can be found using
  the present value of a lump sum formula, even if the amount of each annuity payment is unknown.
 
  Indicate whether the statement is true or false


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jgranad15

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Reply #1 on: Jul 11, 2018
Answer to Question 1

A
Explanation: A) Depreciation = .20  (FA) = 0.0  (70,000,000 ) = 14,000,000.

Answer to Question 2

TRUE


littleanan

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Reply 2 on: Jul 11, 2018
Great answer, keep it coming :)

jackie

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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