The amount of cash (or equivalent)that currently would be required to replace the service capacity of the asset is called the asset's
A)historical cost
B)current cost
C)current exit value
D)present value

Question

Quizplus · Accepted Answer

Historical cost refers to the original cost of the asset when it was first acquired, and may not accurately reflect its current value. Current exit value refers to the amount that could be received if the asset was sold in the current market, which may not reflect the amount needed to replace the asset's service capacity. Present value refers to the value of future cash flows discounted to their current value, and is not directly related to the replacement cost of an asset. Therefore, the best choice is current cost, which represents the amount of cash (or equivalent) that would currently be required to replace the service capacity of the asset.

The Amount of Cash (Or Equivalent)that Currently Would Be Required