Which of the Following Is Not a Feature That Separates

question 66

Multiple Choice

Which of the following is not a feature that separates capital equipment purchases from other purchases?

• A)Capital equipment purchases do not occur with regular frequency.
• B)Capital equipment investment requires large sums of money.
• C)For accounting purposes, most capital equipment is not depreciable over the life of the item.
• D)Buyers can rarely switch suppliers in the middle of a large-scale project or dispose of capital equipment after delivery because of dissatisfaction.
• E)Capital equipment is highly sensitive to general economic conditions.

---

Definitions:

Straight-line Method

A technique for distributing the expense of a physical asset uniformly throughout its lifespan.

Salvage Value

An asset's remaining worth estimated at the conclusion of its life of use.

Book Value

Book value is the net value of a company's assets found on its balance sheet, and it is calculated by subtracting liabilities from the total value of assets.

Double-declining-balance

An accelerated method of depreciation which doubles the normal depreciation rate, reducing the asset's book value more quickly.