Which of the Following Would Not Be Capitalized as Part

question 18

Multiple Choice

Which of the following would not be capitalized as part of a purchased asset's cost?

• A)Sales tax
• B)Installation cost
• C)Shipping costs
• D)Interest costs

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Definitions:

MC Curve

Marginal cost curve represents how the cost of producing one more unit of a good changes as production scales.

Market Quantity

The total amount of a good or service supplied and purchased in a market at a given price.

Fixed Costs

Costs that do not vary with the quantity of output produced, such as rent or salaries.

Economic Profit

The difference between total revenue and total cost, including both explicit and implicit costs, representing excess earnings over the opportunity cost of capital.