A Gain on the Sale of a Plant Asset Should

question 17

Multiple Choice

A gain on the sale of a plant asset should be included in which of the following sections of a statement of cash flows prepared using the direct method?

• A) Investing activities
• B) Operating activities
• C) Financing activities
• D) Any of these,if applied consistently from year to year

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Definitions:

Optimal Output

The level of production that maximizes a firm's profit or minimizes its costs, determined by where marginal cost equals marginal revenue.

Price to Clear

The market price at which the quantity supplied equals the quantity demanded, ensuring all goods in the market are sold.

Profit-Maximizing Output

The optimal production stage for a business, where the highest profit is realized at the point where marginal cost equals marginal revenue.

Total Cost

The complete cost of production, including fixed and variable costs.