Purchase Solution

asset's purchase price

Not what you're looking for?

Ask Custom Question

How does an asset's purchase price and carrying value relate to its market value?

Purchase this Solution
Solution Summary

How does an asset's purchase price and carrying value relate to its market value is determined.

Solution Preview

Purchase price is the price originally paid for acquiring the asset. Carry value is amount or nominal worth of the asset, as reported in the balance sheet for accounting purposes, such as value of machinery after depreciation. In accounting, every asset and liability attributable to a company must have a balance sheet value. The value of ...

Solution provided by:
Sandeep Bardia, MBA
Education
  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
Recent Feedback
  • "Thank you. "
  • "Thank you"
  • "Thank you. I got 20/20 last week for my discussion you help me out with."
  • "Thank you. Great Job. "
  • "Thank you. Great Job. "
Purchase this Solution
Free BrainMass Quizzes
Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Basics of corporate finance

These questions will test you on your knowledge of finance.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

View More Free Quizzes
Related BrainMass Solutions

  • Arguments Against Historical Cost Use in Accounting

    Many companies contend that it is not fair for a company to use the historical cost of an asset, which is the asset's purchase price. The asset appreciates and depreciates over time for many reasons, although depreciation is more common.

  • Accounting for leases: Pros and cons

    If the lease conveys ownership at the end of the lease, has a bargain purchase option, extends for more than 75% of the asset's life or the present value of the payment is 95% of the asset's value, then the lease is treated as a financed-asset purchase

  • Working with risk and return for purchase of risky asset: beta coefficient of .85

    when the asset's beta coefficient is 0.85?

  • Accounting For Leases: Types of Leases

    The lessee must determine the purchase price of the asset. This is generally relatively easy if the lessor sells and leases such assets (such as automobile or copier dealers).

  • Railcar Leasing: Lessors' direct financing lease

    The two Type I characteristics that are met are: a) The lease covers more than 75% of the asset's useful life (i.e., 8/8 = 100%), and b) The present value of the future minimum lease payments of $8,345,640 exactly equals the leased asset's fair

  • Classifying Leases as Capital or Operating

    the asset at a "bargain price" at the end of the lease term.

  • Depreciation Expenses for a Metal Press

    The purchase will equate balance sheet amounts with the metal press the company has. Depreciation expenses for Metal Press assets are examined. The ROA is calculated.

  • Value of any asset

    value of past dividents and price increases for the asset, past is irrelevant D) future value of the expected earnings discounted by the asset's cost of capital we require the present value and not the future value; the asset is being valued now

  • Multiple Choice

    the asset's expected cash flows c. the asset's required return d. the asset's terminal value e.

View More Related Solutions