If Nike Sells Basketball Shoes for $150 Per Pair and the Cost

question 30

Multiple Choice

If Nike sells basketball shoes for $150 per pair and the cost of producing and selling a pair of basketball shoes is $15, Nike's profit per unit on a pair of basketball shoes is:

• A) $135.
• B) $160
• C) $165.
• D) $10.

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Definitions:

Amortization

The process of spreading the cost of intangible assets over their useful life, or gradually paying off debt through a series of fixed payments.

Research Costs

Expenses associated with activities undertaken to discover new knowledge, develop new products or processes, without assurance of commercial success.

Expensed

Costs that are charged against income in the period they are incurred, rather than being capitalized and amortized over time.

Finite Life

Finite life refers to the fixed period during which an asset is expected to be useful before it becomes obsolete or its value is fully depreciated.