Cardinal Company Incurs $800,000 During the Year to Construct a Facility

question 78

True/False

Cardinal Company incurs $800,000 during the year to construct a facility that will be used exclusively for the care of its employees' pre-school age children during normal working hours. Assuming Cardinal claims the credit for employer-provided child care this year, its basis in the newly constructed facility is $640,000.

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Definitions:

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than another entity.

Bongos

Bongos are a pair of small, connected drums of different sizes, originating from Cuba, played with the hands and used in Latin American music.

Frisbees

Disc-shaped gliding toys or sporting items that are thrown and caught for recreational purposes.

Opportunity Cost

Passing up on possible benefits from numerous alternatives due to choosing one.