The Expense of Adapting an Existing Asset to a New

question 53

True/False

The expense of adapting an existing asset to a new or different use must be capitalized to the cost of the asset for tax purposes.

---

Definitions:

Equity

Ownership interest in a company, represented by shares that entitle holders to a share of the company's profits.

Financial Leverage

The use of borrowed money to multiply financial performance in terms of ROE and EPS.

Shareholders

Individuals or entities that own shares in a corporation, giving them partial ownership and possibly a right to vote at shareholders' meetings.

Capital Employed

The total amount of capital used for the acquisition of profits by a firm or project, including assets and working capital.