Which Type of Transaction Is Represented by the Diagram Below

question 45

Multiple Choice

Which type of transaction is represented by the diagram below?

• A)An automobile salvage business holds weekly auctions at which it sells its entire inventory.
• B)A grocery store sells products to consumers.
• C)A hobbyist restores antique cars.When a car is finished,she sells it on Ebay.
• D)A firm sells movies to consumers through an online downloading service.

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Definitions:

Internal Rate

Often refers to the internal rate of return (IRR), which is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Operating Costs

Expenses associated with the day-to-day functioning of a business, such as rent, utilities, and payroll, excluding costs related to production.

Annual Cost

The total expenses associated with maintaining or operating something over the course of a year.

Useful Life

The estimated period over which a fixed asset is expected to be useful to the owning entity, crucial for calculating depreciation.