Which of the Following Is an Example of an Intangible

question 16

Multiple Choice

Which of the following is an example of an intangible with an indefinite life?

• A) A copyright on a book of poetry.
• B) The goodwill value resulting from a business combination.
• C) A patent on a new invention.
• D) The research costs to develop a new drug.

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), representing the amount of profit realized from a business's operations.

Fixed Costs

Expenses that do not change with the level of output or production, such as rent, salaries, and insurance.

Variable Costs

Expenses that fluctuate based on the amount of products or services a company generates.

Break-even Sales

The amount of revenue that a business must generate to cover its fixed and variable costs before starting to realize a profit.