Mark the Correct Answer.Section 197 Intangibles

question 71

Multiple Choice

Mark the correct answer.Section 197 intangibles:

• A)Are amortized based on current fair market value rather than their actual cost.
• B)Must be amortized over a 15 year life,regardless of their actual life.
• C)Include intangible assets created and not purchased by the taxpayer.
• D)Do not include purchased goodwill or going-concern value.

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Definitions:

Marginal Costs

The additional cost incurred by producing one extra unit of a product or service.

Economic Profits

Profits exceeding the opportunity costs of a next best alternative, measuring the extent to which a firm has generated excess returns over its costs, including the cost of capital.

Cost of Capital

The rate of return a company must earn on its investments to maintain its market value and attract funds.

Break-Even Quantity

The number of units that must be sold to cover all fixed and variable costs, resulting in neither profit nor loss.