Firms That Fail to Produce Returns Greater Than Alternative Investments

question 11

True/False

Firms that fail to produce returns greater than alternative investments typically go out of business.

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Definitions:

Depreciation

The systematic allocation of the cost of a tangible asset over its expected useful life, reflecting its consumption, wear and tear, or obsolescence.

Accumulated Depreciation

The total amount of an asset's cost that has been allocated as depreciation expense over its useful life, reducing its book value on the balance sheet.

Asset

Tangible or intangible items of value owned or controlled by a person or company, capable of producing future economic benefits.