cooperate to maximize joint profits and the incentive to cheat on the agreement in order to increase the firm"s share of the profit.
True or false: Adams, Inc. has found that their managers are reluctant to replace old equipment with new, updated equipment. To stop this practice, Adams should compute ROI using assets' net book values.
Answer: False
Explanation:
According to the given scenario, the given statement is false as net book value discourages equipment replacement.
What is meant by net book value?The historical cost of an asset, less any sums deducted for depreciation, amortization, or depletion, is its net book value. The requirement that assets be reported at their market worth is a byproduct of fair value reporting. Several of the financial reporting rules mandated by US GAAP are emphasized by the fair value concept. "An asset's selling price agreed upon by a willing buyer and seller, presuming both parties are knowledgeable and join the transaction freely," is what fair value reporting refers to.
When revealing the worth of property, plant, and equipment, NBV is frequently utilized (PPE). This indicates that it is diminished as assets are amortized or depreciated. It is based on the notion that assets depreciate slightly over time as a result of use.
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the discovery of a large amount of previously-undiscovered oil in the u.s. would shift
What will happen if there is discovery of a large amount of previously-undiscovered oil in the u.s. is that :
In long-run aggregate-supply curve to the right.For aggregate supply curve shifts to the right, it can be deduced that at every price level, there is a production of higher quantity of real GDP. This is usually referred to as positive supply shock in economics.Therefore, aggregate-supply curve to the right in the long run.
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