Magic Company Owns a Fixed Asset with an Original Cost

question 130

Multiple Choice

Magic Company owns a fixed asset with an original cost of $100,000. Magic Company estimates it will use the asset for 4 years, at which time the asset can be sold for $10,000. The book value of the asset after two years of use is:

• A) $100,000
• B) $45,000
• C) $55,000
• D) $50,000

Apply knowledge of perceptual phenomena to explain illusions and common perceptual errors.

Understand the nature and formation of agency relationships.

Distinguish between different types of agency relationships and their implications.

Grasp the legal principles surrounding the creation of agency through appearance, ratification, and agreement.

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Definitions:

Beneficial Supply Shock

A situation in which supply increases unexpectedly, leading to lower prices and potentially higher consumer satisfaction without causing negative economic effects.

Natural Resources

Elements found in the natural environment such as minerals, forests, water, and fertile soil, which can be harnessed for economic profits.

Long-Run Aggregate Supply Curve

A graphical representation showing the relationship between the overall price level and the total output a economy can produce when all resources are fully employed, assuming no changes in technology or resource availability.

Technological Breakthrough

Sudden, significant progress or innovation in technology that dramatically changes industries or societies.