What Is Functional Loss

question 42

Multiple Choice

What is functional loss?

• A)Functional loss occurs when the asset can still perform its function despite a loss in its market value.
• B)Functional loss occurs when the asset becomes unusable to to misuse.
• C)Functional loss occurs when the asset wears out due to being used for its intended function.
• D)Functional loss occurs when the asset wears out due to the passage of time, whether or not it is used.
• E)Functional loss occurs when the asset can still perform its original function, but that function is no longer valued.

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Definitions:

Burton Malkiel

An American economist and writer, most famous for his classic finance book "A Random Walk Down Wall Street."

Dividend Discount Model

A valuation method used to estimate the value of a stock by discounting predicted dividends to their present value.

Capital Gains

The profit from the sale of an asset or investment when the sale price exceeds the purchase price.

After-tax Value

The value of an investment or income after all taxes have been deducted, reflecting the net gain or loss.