When Several Long-Term Assets Are Purchased in a Single Transaction

question 53

True/False

When several long-term assets are purchased in a single transaction, the purchase price is allocated among the assets based on their relative fair values.

---

Definitions:

Price Level

A measure of the average prices of goods and services in an economy at a given time period.

Real Wealth

The value of an individual's or entity's assets, taking into account the effects of inflation on purchasing power.

Liquidity Preference

The desire to hold cash or easily convertible assets rather than investments that might be harder to convert into cash.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.