One methodology used to evaluate equipment investment decisions where the investment entails an initial investment, fixed costs, and variable costs is break-even analysis.
Answer the following statement true (T) or false (F)
True
A standard approach to choosing among alternative processes or equipment is break-even analysis.
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Ramirez Stores purchased a trademark at the beginning of 2016 for $340,000 . Economic benefits were expected for 10 years, but the trademark's legal life was 20 years. Also, during 2016, Ramirez incurred research and development costs of $200,000 . The book value of the trademarks at December 31, 2016, is
a. $506,000 b. $306,000 c. $323,000 d. $486,000
When using the indirect method for preparing the statement of cash flows, all of the following will appear in the operating activities section except:
a. Increase in deferred tax. b. Depreciation expense on leased assets. c. Interest expense. d. An increase in long-term liabilities.
When using a cost-based approach, once the cost of a good or service has been determined, additional factors need not be considered in establishing a selling price
Indicate whether the statement is true or false
On June 1, $400,000 of bonds were purchased as a long-term investment at 101.5 and $500 was paid as the brokerage commission. If the bonds bear interest at 12%, which is paid semiannually on January 1 and July 1, what is the total cost to be debited to the investment account?
A) $400,000 B) $406,500 C) $405,500 D) $402,000