The going-concern assumption holds that the business entity will continue its operations long enough to realize its projects, commitments, and ongoing activities. The assumption is that the entity is not expected to be liquidated in the foreseeable
future or that the entity will continue for an indefinite period of time. Explain the relationship between the going-concern assumption and the historical cost principle and the amortization of assets.
The going-concern assumption justifies the valuation of assets on a nonliquidation basis. The assumption that the entity will continue its operations long enough to realize its projects, commitments, and activities renders liquidation values irrelevant since assets typically will be held and not sold in the foreseeable future. Fixed assets and intangibles thus are amortized over their useful life rather than over a shorter period in anticipation of early liquidation.
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Carlos believes that most court decisions and legal doctrines are best understood as efforts to promote an efficient allocation of resources in society. Carlos adheres to the ________ school of jurisprudence
A) natural law B) positivist C) sociological D) law and economics
In the context of factors of production,which of the following statements is true of capital?
A. It includes all inputs that offer value in their natural state. B. It does not include money. C. It involves the creative contributions of people working within an economy. D. It is not a fundamental resource for nonprofits.
To fully compensate plaintiffs in breach of contract cases, courts always award punitive damages commensurate with the losses the plaintiffs have suffered
Indicate whether the statement is true or false
The management of Kinion Corporation is considering the purchase of a machine that would cost $170,000, would last for 4 years, and would have no salvage value. The machine would reduce labor and other costs by $60,000 per year. The company requires a minimum pretax return of 12% on all investment projects. (Ignore income taxes.):See separate Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.Required:Determine the net present value of the project.
What will be an ideal response?