The principal argument used to justify the replacement cost system over exit values is that if the great majority of the firm's assets were not already owned, it would be economically justifiable to acquire them.

Question

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The argument is that if the replacement cost of the firm's assets is lower than their exit values, it would make economic sense to acquire those assets rather than exiting the business. This justifies the use of the replacement cost system over the exit value system.

The Principal Argument Used to Justify the Replacement Cost System