Consider the production costs for a firm,one of which is the cost of depreciation.Depreciation costs are
A)payments to outside suppliers.
B)the cost of money borrowed to buy a durable asset.
C)an estimate of the loss of value of the firm's physical capital.
D)a measure of the depreciation of financial assets of the firm.
E)irrelevant to an accounting of the firm's total costs.

Question

Quizplus · Accepted Answer

Depreciation costs are an estimate of the loss of value of the firm's physical capital. It reflects the fact that an asset such as a machine or a building loses value over time as it wears out or becomes obsolete.

Consider the Production Costs for a Firm,one of Which Is