Final answer:
The statement that a company will always capitalize the cost of a long-lived asset is false. Companies have the option to capitalize or expense costs based on their nature and usefulness over time, as well as accounting standards.
Step-by-step explanation:
The query on whether a company will always capitalize the cost of a long-lived asset is a matter of business and accounting practices. In business, companies can choose to capitalize or expense the costs related to long-lived assets. The statement that a company will always capitalize the cost of a long-lived asset is false. Capitalization refers to including the cost of an asset on the balance sheet rather than expensing it on the income statement, and it typically applies to assets that provide a benefit to the company over multiple periods, such as buildings, machinery, and equipment.
Fixed costs, such as the cost of machinery or equipment, and rent on a factory, are typical examples of capitalized assets. However, in the long run, all inputs are variable and the firm can adjust its capital stock to produce the desired level of output efficiently. The decision to capitalize or expense a cost often depends on the nature of the cost, its usefulness over time, and accounting regulations.