The Fair Value of a Plant Asset Is Equal To

question 165

Multiple Choice

The fair value of a plant asset is equal to:

• A)the amount the business could sell the asset for.
• B)the amount of cash paid plus the dollar value of noncash consideration given in exchange for the plant asset at acquisition.
• C)the amount of cash paid plus the loan taken out to finance the purchase of the plant asset.
• D)the amount a company can receive for the asset when sold in order to go out of business.

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Definitions:

Hyperinflation

A very high rate of inflation.

Deflation

A decrease in the general price level of goods and services in an economy over a period, often leading to increased purchasing power of the currency.

Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Disinflation

A reduction in the rate of inflation