The Asset Section of the January 1, 20X7, Balance Sheet

question 160

Multiple Choice

The asset section of the January 1, 20X7, balance sheet of Petticoat Company includes a machine which was acquired on January 1, 20X3.The machine's original cost was $500,000, and the estimated life was determined to be 10 years.The estimated residual value was zero, and the straight-line method of depreciation was chosen.If operating income before depreciation is $90,000, the rate of return on average net book value for 20X7 is _____.

• A)14.55%
• B)13.33%
• C)16.00%
• D)32.79%

Understand how technological improvements and wage changes affect the firm's use of capital and labor.

Understand the concepts of elastic and inelastic demand for resources, and how the presence of substitutes affects this elasticity.

Learn the effects of wage changes on the quantity of labor demanded and the elasticity of labor demand.

Understand the factors leading to shifts in the labor demand curve.

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Definitions:

Price Discrimination

The strategy of selling the same product at different prices to different segments of consumers, based on their willingness to pay.

Combination Meal

A set meal at a restaurant that includes multiple items at a fixed total price, often providing a discount compared to purchasing items separately.

Student ID

A unique identifier assigned to students by educational institutions for tracking and administrative purposes.

Reservation Price

The maximum price that a consumer is willing to pay for a product, beyond which they would choose not to purchase it.