In our analysis, it is best to treat capital as if it was:
A) rented, even if it was purchased.
B) purchased, even if it is just rented.
C) purchased and also rented.
D) rented first, then purchased.

Question

Quizplus · Accepted Answer

Treating capital as if it was rented allows us to account for the cost of using the capital over time, rather than just a one-time purchase cost. This approach better reflects the ongoing expenses associated with owning and maintaining capital equipment.

In Our Analysis, It Is Best to Treat Capital as If