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- Which of the following is a false statement about depreciation? It has no impact on cash It represents the physical deterioration of an asset It exists because of the matching principle Accelerated methods of calculating depreciation are acceptable under GAAPWhich of the following is not a factor in selecting a depreciation method? a. salvage valueb. repair and maintenance costsc. Inflationd. the risk associated with the cash flows from the assetThe undiscounted future net cash flow is used as a benchmark to determine any impairment loss on which of the following types of intangible assets? O Limited life intangibles. O Indefinite life intangibles other than goodwill. O Goodwill. O Indefinite life intangibles.
- Which of the following best describes depreciation?A It is a means of spreading the payment for the asset over its total estimated lifeB It represents the decline in the market value of the assetC It is a means of spreading the cost of an asset over its estimated useful lifeD It is a way of estimating the cash needed to replace the asset in the futureWhich of the following statements is true about assessing recoverability of property, plant and equipment? Group of answer choices If the sum of the undiscounted future cash flows exceeds the carrying value of the asset, then the asset is not impaired. If the sum of the undiscounted future cash flows exceeds the carrying value of the asset, then the asset is impaired. If the sum of the discounted future cash flows exceeds the carrying value of the asset, then the asset is not impaired. If the sum of the discounted future cash flows exceeds the carrying value of the asset, then the asset is impaired.Assuming that there are no income taxes, which of the following is correct concerning depreciation? Select one: a. Depreciation reduces net income but does not change cash from operations. b. Depreciation provides less cash from operations than would have been available without the depreciation. c. Depreciation builds a cash reserve to fund the replacement of plant, property and equipment d. None of the other choices is correct. e. Depreciation increases cash from operations and decreases net income.
- What is Salvage Value? Can you relate this concept to a non-accounting concept? The book explains the Straight - Line depreciation methods (page 396). There are other methods that are important to know. Is the idea of depreciation to match the net book value of the asset to the market value of the asset? Why or why not?Indicate whether the following statement is true or false: The recoverable amount for each class of asset is compared to the carrying amount for each class of asset unless that class of asset forms part of a cash-generating unit, in which case the recoverable amount for that cash-generating unit is compared to the carrying amount for that cash-generating unit. Please don't give plagiarised answer thankuWhat is the nature of the recoverability test for indefinite-life intangible assets? Group of answer choices There is no recoverability test for indefinite-life intangible assets. Is the carrying value of the asset greater than the sum of future discounted cash flows generated by the asset? Is the carrying value of the asset greater than the fair value of the asset? Is the carrying value of the asset greater than the sum of undiscounted future cash flows generated by the asset?
- 2)When calculating free cash flows, which of the following statements is NOT true regarding the depreciation? Group of answer choices A)As an accrual, depreciation does not factor into free cash flow calculations. B)Depreciation is an accrual, not a cash flow. C)Depreciation create a tax shield. D)Depreciation is first removed and the subsequently added back in when calculating free cash flows.Property, Plant and Equipment We review long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable based on the undiscounted future cash flows. If the carrying amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based on quoted market values, discounted cash flows, or external appraisals, as appropriate. Dollars in Millions Cost of property and equipment (beginning of year) $ 54,644 Cost of property and equipment (end of year) 59,766 Capital expenditures during the year 6,510 Accumulated depreciation (beginning of year) 28,016 Accumulated depreciation (end of year) 29,310 Depreciation expense during the year 2,490 Cost of property and equipment sold during the year 1,388 Accumulated depreciation on property sold 1,196 Cash received on property sold 130 Required: Compute the amount of property and equipment that United Presents…1. Which of the following is NOT a method commonly used to determine the residual value of a property? a) Estimate the residual value from expected changes in property value due to projected income b) Estimate the residual value from sales data of older “comparable” properties c) Discount all remaining cash flows for the specified holding period and then use a terminal cap rate for all future years d) Hire an appraiser to perform a forward-looking appraisal of the property 2. Which of the following is generally NOT found in a commercial lease? a) Limits on social events held in the space b) Restrictions on assignment or subletting c) Responsibility for maintenance and repair d) Alteration restrictions 3. The possibility that a property might be rezoned would be considered a: a) Business risk b) Financial risk c) Environmental risk d) Legislative risk 4. Which of the following statements is NOT true of real estate syndications? a) They offer tax benefits…