SuitCity Purchased an Operating Asset Expected to Benefit the Company

question 23

Multiple Choice

SuitCity purchased an operating asset expected to benefit the company for 10 years for a cost of $100,000 cash.The old operating asset was fully depreciated and was kept in operations.What effect will acquiring this asset have on the performance measurement of an investment centre?

• A)a negative effect
• B)a positive effect
• C)No effect since cash replaces the asset sold.
• D)More information is needed to determine the effect.

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Definitions:

Trichromatic Theory

A theory of color vision stating that the human eye has three types of receptors with differing sensitivities to different light wavelengths.

Opponent-process Theory

A psychological and neurological model that describes how contrasting colors, emotions, and states are regulated in the human body, stating that the activation of one process automatically triggers the suppression of its opposite.

Bipolar Cell

A type of neuron found in the retina, involved in the transmission of visual signals from photoreceptors to ganglion cells.

Negative Afterimages

A visual phenomenon where the retina retains an image after exposure, often in complementary colors to the original stimulus.