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 replacement cost
C) current exit value
D) present value

Question

Quizplus · Accepted Answer

The current replacement cost reflects the current value of the asset as it takes into account the cost of obtaining a new asset with similar service capacity at current market prices. Historical cost refers to the original cost incurred to acquire the asset, and may not reflect its current value. Current exit value refers to the amount at which an asset could be sold in the current market, which may not reflect the cost of replacing the asset's service capacity. Present value refers to the current value of future cash flows and is not relevant to determining the value of an asset's service capacity.

The Amount of Cash (Or Equivalent) That Currently Would Be