When Capital Loses Value Over Time Because of Use and Wear

question 32

Multiple Choice

When capital loses value over time because of use and wear, we call this

• A)depreciation.
• B)wear and tear.
• C)creative destruction.
• D)capital utilization.
• E)decapitalization.

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Definitions:

Cumulative Earnings

The total amount of net income earned by a company over its entire existence.

Net Pay

Net pay refers to the amount of money an employee takes home after all deductions, such as taxes and retirement contributions, have been subtracted from their gross salary.

FICA Social Security

A U.S. government program funded by payroll taxes, providing retirement benefits, disability income, and survivor benefits.

FICA Medicare

A federal payroll (or employment) tax used to fund the Medicare program, split between employers and employees.