INTRODUCTION TO ENTREPRENEURSHIP
IMPORTANCE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Opportunity cost of what was not purchased.
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Associated cost with upkeep of property.
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Potential profit at sale.
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Possible loss of value of property and loss at the time of sale.
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Detailed explanation-1: -Such amounts include the purchase price (less any negotiated discounts), permits, freight, ordinary installation, initial setup/calibration/programming, and other normal costs associated with getting the item ready to use. These costs are termed capital expenditures and are assigned to an asset account.
Detailed explanation-2: -In the above question, the cost of staff training is not part of the cost of the asset, therefore it should not be taken into consideration for the purpose of calculating depreciation.
Detailed explanation-3: -The correct answer is option (c). Insurance cost for equipment after it has started being used would normally not be included in the cost of the equipment.
Detailed explanation-4: -The original cost of an asset takes into consideration all of the items that can be attributed to its purchase and to putting the asset to use. These costs include the purchase price and such factors as commissions, transportation, appraisals, warranties and installation and testing.