Depreciation Is Based on All of the Following Assumptions EXCEPT

question 42

Multiple Choice

Depreciation is based on all of the following assumptions EXCEPT

• A)that the asset has a fixed,determinable period of utility.
• B)that the asset has a fixed,determinable value that will exist when the depreciation process is complete.
• C)that the value of the asset will decline in a continuous and predictable manner over the period of utility.
• D)that it is the cost incurred to replace one asset with an identical asset.

---

Definitions:

Producer Surplus

The gap between the price sellers are ready to accept for a good and the actual price obtained.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved, leading to an underproduction or overproduction of that good or service.

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium outcome is not achieved or when the market does not allocate resources at the optimal point.

Tax Revenue

The profit derived by governments from tax collection.