Which One of the Following Is an Example of the Expected

question 61

Multiple Choice

Which one of the following is an example of the expected benefit approach for valuing long-lived assets? 

• A) Current cost.
• B) Historical cost.
• C) Discounted present value.
• D) Current replacement value.

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Definitions:

Endowment Fund

A financial endowment given to institutions like universities, museums, and non-profits to invest and use the annual income from investments for operations or programs.

Perpetuity

A financial instrument that pays a steady, never-ending stream of cash flows to the investor.

Compounded Semi-Annually

A method where interest is added to the principal balance of an investment or loan twice a year, leading to compound growth.

Trust Fund

A legal entity that holds and manages assets on behalf of another, guided by the terms set forth in a trust agreement.