Additions and Improvements Are Costs That Are Incurred to Maintain

question 85

True/False

Additions and improvements are costs that are incurred to maintain the asset's operating efficiency, productive capacity, or expected useful life.

---

Definitions:

Straight-Line Depreciation

A method of calculating the depreciation of an asset, dividing the difference between its cost and salvage value evenly over its useful life.

Capital Budgeting

involves the evaluation and selection of long-term investments that are in line with the goal of maximizing the value of a firm.

Incremental Sales

The additional sales generated by a particular business action or decision, reflecting the net increase in sales due to that specific activity.

Operating Expenses

Expenses that relate to the day-to-day operations of a business, excluding costs associated with the production of goods.