Answered: Is the asset's cost basis used in…

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Production And Costs

Section: Chapter Questions

Problem 5WNG

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Is the asset's cost basis used in calculating the gain or loss to the firm?

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Asset cost basis - It the value of asset which is used for tax purposes .This help to calculate the gain or loss on assets

Example - If firm sells a product than the value of taxes included into it and if firm recover it's overall cost than it will be net loss.

Yes, asset cost basis used in calculating the gain and loss to the firm as the cost basis used for tax purposes that's why firm include the taxes on overall price of of the product and recover the amount of taxes by firm by consumer .

Like firm include sells tax in the price of the product which it has to pay government .

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