In business-to-business products, what is the difference between capital equipment and accessory equipment?
What will be an ideal response?
Capital equipment, sometimes referred to as installations, refers to big-ticket items that last for a number of years. Accessory equipment refers to portable items that cost less and have a shorter life span than capital equipment.
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Bates Company purchased equipment on January 1, 2006, at a total invoice cost of $600,000. The equipment has an estimated salvage value of $15,000 and an estimated useful life of 5 years. What is the amount of accumulated depreciation at December 31, 2007, if the straight-line method of depreciation is used?
a. $120,000 b. $240,000 c. $117,000 d. $234,000
Current Cap. Structure Proposed Cap. Structure Assets $ 15 million $15 million Debt $0 $6 million Shares O/S 600,000 ? Bond Int. Rate n/a 8% There are no taxes. EBIT is expected to be $2.5 million, but could be as high as $3.5 million if an economic expansion occurs, or as low as $2 million if a recession occurs. All values are market values. What is EPS during an expansion for the proposed capital structure?
A. $4.17 B. $5.03 C. $5.83 D. $8.39 E. $9.72