Which of the following enhances the earning capacity of an asset?
AReduction in operating costs
BBoth A and C above
CReplacing damaged parts of an asset
DIncrease in working capacity of an asset
Correct answer
B. Both A and C above
Explanation
Enhancement of earning capacity can be by way of replacement of worn out or damaged parts which retarded the earning capacity and increase in the working capacity increases the earning capacity of the asset.