Businesses Match Their Long-Term Capital Needs to

question 279

Multiple Choice

Businesses match their long-term capital needs to

• A) the firm's debt to equity ratio.
• B) the ratio of long-term vs. short-term capital available.
• C) trade credit discounts.
• D) their long-term goals and objectives.

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Definitions:

Expected Useful Life

The estimated length of time an asset will be used in normal business operations.

Depreciation Calculation

The process of allocating the cost of a tangible asset over its useful life.

Placed In Service

The point in time when an asset is ready and available for its intended use, often marking the start of depreciation or amortization for accounting purposes.

Depreciable Cost

The total cost of an asset that is subject to depreciation, including purchase price and any additional expenses to bring the asset to its intended use, minus salvage value.