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Magpie Plc Purchased a Building on a Prime Central Business

question 45

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Magpie Plc purchased a building on a prime central business district site for €800,000.The value of the land is considered to be €350 000.The useful life of the building is expected to be 25 years after Magpie Ltd spends a further €80 000 on improvements.The residual value of the building at that time is estimated to be €60 000.The benefits from owning the land and building are expected to be derived evenly.What is the appropriate annual depreciation charge?


Definitions:

OTC Options

Over-the-counter options are trades made directly between two parties, not on a formal exchange, tailored to the parties' requirements.

Counterparty Credit Risk

The risk that the other party in a financial transaction might default on their contractual obligations.

Bull Money Spread

An options strategy used by investors to profit from the moderate rise in the price of a stock.

Puts

Options contracts giving the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

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