Use the Following Information to Answer the Next Two Questions

question 92

Multiple Choice

Use the following information to answer the next two questions.
Franco Company uses IFRS and owns property, plant and equipment with a historical cost of 5,000,000 euros. At December 31, 2013, the company reported a valuation reserve of
8,565,000 euros. At December 31, 2014, the property, plant and equipment was appraised at
5,525,000 euros.
-The property, plant and equipment will be reported on the December 31, 2014 statement of financial position at

• A) 5,000,000 euros.
• B) 5,525,000 euros.
• C) 8,565,000 euros.
• D) 9,090,000 euros.

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Definitions:

Equity

The value of an asset after deducting the amount of all liabilities on that asset. In investing, it often refers to the ownership interest held by shareholders in a corporation.

Firm's Debt

The total amount of money a company owes to creditors, including loans, bonds, and other forms of debt.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk of financial loss.

Call Option

An agreement that grants the purchaser the option, not the compulsion, to acquire an asset at a predetermined price during a defined timeframe.