A Gain or Loss on Disposal of a Plant Asset

question 174

Multiple Choice

A gain or loss on disposal of a plant asset is determined by comparing the

• A)replacement cost of the asset with the asset's original cost.
• B)book value of the asset with the asset's original cost.
• C)original cost of the asset with the proceeds received from its sale.
• D)book value of the asset with the proceeds received from its sale.

Calculate and interpret the sales mix and its effect on business profitability.

Understand and calculate the margin of safety ratio and its significance for business stability.

Understand the concept of operating leverage and its impact on business profits in response to sales changes.

Perform a detailed financial analysis to determine sales levels needed for desired profit outcomes.

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Definitions:

Resistance Phase

The second stage of the general adaptation syndrome, characterized by the body's adaptation to a continuous stressor and an attempt to restore homeostasis.

Minor Frustrations

Small, often daily, annoyances or irritations that can accumulate and affect mood or well-being.

Realistic Optimists

Individuals who maintain a positive outlook on life while still being grounded in reality, acknowledging potential obstacles and planning accordingly.

Passive Problem Solving

An approach to resolving issues where individuals avoid direct confrontation or active attempts to change a situation, often hoping the problem resolves on its own.