The Primary Difference Between Ordinary Repairs and Extraordinary Repairs Is

question 32

Multiple Choice

The primary difference between ordinary repairs and extraordinary repairs is:

• A)ordinary repairs cost less.
• B)ordinary repairs are expenditures for routine maintenance and upkeep,whereas extraordinary repairs increase an assets economic usefulness in the future through increased efficiency,capacity,or longer life.
• C)extraordinary repairs only maintain the asset for a short time,whereas ordinary repairs increase the usefulness of assets beyond their original condition.
• D)extraordinary repairs are expenditures,not expenses.

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Definitions:

Call Premium

The amount by which the price of a call option exceeds its intrinsic value, reflecting the time value and volatility of the underlying asset.

Time Value

The idea that money currently in hand is more valuable than the same sum received in the future because of its ability to earn more over time.

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase a stock or other asset at a specified price within a certain time frame.

Present Value

The current value of a future amount of money or stream of cash flows given a specified rate of return.