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A lawn maintenance company compares two ride-on mowers-the Excelsior, which has an expected working-life of six years, and the Grassassinator, which has a working life of four years. After examining the equivalent annual annuities of each mower, the company decides to purchase the Excelsior. Which of the following, if true, would be most likely to make them change that decision?
Unrealized Loss
A loss that results from holding an asset that has decreased in value, but the asset has not yet been sold.
Fair Value Adjustment
A financial accounting process of adjusting the fair market value of assets and liabilities.
Unrealized Loss
A decrease in the value of an investment that has not yet been sold and thus, the loss has not been realized.
Gain on Sale of Investment
The profit realized from selling an investment for more than its purchase cost.
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