BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

BUSINESS ENVIRONMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Steel that is used to produce tools and machinery is classified as a
A
consumer good
B
capital good
C
market good
D
production good
Explanation: 

Detailed explanation-1: -A steel fabrication facility is correct. The reason is that such a fabrication facility facilitates manufacturing of items that require steel. Hence, it can be categorized as a capital good.

Detailed explanation-2: -Capital goods are mostly fixed assets that are purchased by the producer in order to produce consumer goods. Examples: Buildings, equipment, machinery, furniture, and more.

Detailed explanation-3: -Capital goods include buildings, machinery, equipment, vehicles, and tools. Capital goods are not finished goods, instead, they are used to make finished goods.

Detailed explanation-4: -Capital assets includes land, improvements to land, buildings, building improvements, vehicles, machinery, equipment, and all tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period.

There is 1 question to complete.