Nancy,aged 70,has a Vacant Plot Adjacent to Her House That

question 1

Multiple Choice

Nancy,aged 70,has a vacant plot adjacent to her house that she intends to bequeath to her grandson Roy upon her death.However,an important railroad project is being undertaken nearby and the local authorities have informed Nancy that the new railroad will cover her vacant lot.They have also promised her fair compensation in return.Can the government take her property?

• A)No,because the plot belongs to her.
• B)No,because she already intends to bequeath the land to someone.
• C)Yes,because the government has the power of eminent domain.
• D)Yes,because the government is the actual owner of all private property.

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Definitions:

Operating Lease

An operating lease is an agreement allowing someone to use an asset without ownership, typically for shorter periods, and expenses are recorded as operating expenses.

Implicit Interest Rate

The interest rate that can be inferred from the terms of a lease or loan, reflecting the true cost of borrowing when the interest rate is not explicitly stated.

Straight-line Method

A depreciation technique that allocates an equal amount of the asset's cost to each year of the asset's useful life.

Depreciation Expense

The allocated cost of an asset over its useful life, representing how much of the asset's value has been used up during an accounting period.