Assume That Costa Plc Buys a Machine in 2003 for $200,000

question 11

Multiple Choice

Assume that Costa Plc buys a machine in 2003 for $200,000 when the general price index is 150. At the end of 2006, the index has risen to 210 and the current cost of the machine is $300,000. What is the current cost gain or loss net of inflation?

• A) $100,000
• B) $220,000
• C) $120,000
• D) $ 80,000
• E) $ 20,000

---

Definitions:

Fundamental Attribution Error

A cognitive bias that causes people to overemphasize personal characteristics and ignore situational factors in judging others' behavior.

Good Actions

Behaviors or deeds that are ethically right, beneficial to others, or contribute positively to society.

Bad Actions

Behaviors or deeds that are morally wrong or harmful to others.

Fundamental Attribution Error

The tendency to overestimate the effect of disposition or personality and underestimate the effect of the situation in explaining social behavior.