In the Context of Business Products,which of the Following Is

question 115

Multiple Choice

In the context of business products,which of the following is a difference between major equipment and accessory equipment?

• A) Major equipment is often standardized,whereas accessory equipment is often custom designed for each customer.
• B) Major equipment is depreciated over time,whereas accessory equipment is charged as an expense in the year it is purchased.
• C) Major equipment has a short life,whereas accessory equipment has a long life.
• D) Major equipment is marketed more through advertising,whereas accessory equipment is marketed via personal selling.

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Definitions:

Pre-Tax Cost

The expense or cost incurred by an entity before the deduction of taxes.

Net Present Value

A financial measure that computes the disparity between the present value of cash coming in and going out over a certain period.

Flotation Cost

The total costs incurred by a company in issuing new securities, including underwriting, legal, registration, and distribution fees.