An Explicit Cost for a Business That Manufactures Bicycles Would

question 131

Multiple Choice

An explicit cost for a business that manufactures bicycles would be the

• A) value of the products that the firm's employees could produce at another company.
• B) salary that the owner of the business could earn elsewhere.
• C) goods and services provided by the government with the taxes the firm pays.
• D) wages paid to employees.
• E) various products that could be made with the steel used to make bicycles.

---

Definitions:

Required Return

The minimum annual percentage earned by an investment that will induce individuals or companies to commit money to the investment. It is also known as the cost of capital when applied to investment appraisal.

Ignore Taxes

A financial analysis assumption where tax implications are disregarded to simplify the calculation.

Initial Cost

The initial expenditure associated with purchasing an asset or starting a project, including setup, implementation, and acquisition costs.

CCA Class

Stands for Capital Cost Allowance Class, which is a Canadian tax categorization for depreciation of tangible and intangible assets.