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According to the risk/return trade-off, the higher the risk, the lower the interest rate charged by the lender.
Excess Capacity
The available production capability that exceeds the current demand for products or services.
Variable Cost Method
An accounting technique that tracks production costs that vary with the level of output.
Markup Percentage
The percentage added to the cost of a product or service to determine its selling price.
Invested Assets
Assets in which funds have been placed with the expectation of generating income or profit.
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