As a Factor of Production, the Term Capital Includes

question 24

Multiple Choice

As a factor of production, the term capital includes:

• A) stocks and bonds issued by corporations.
• B) natural resources such as land and water.
• C) tools, machinery, and buildings.
• D) services provided by the government that enable businesses to be more productive.

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Definitions:

Residual Income

The excess of divisional income from operations over a “minimum” acceptable income from operations.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the profit of an investment by its cost.

Income From Operations

Income from operations refers to the profit realized from a firm's core business activities, excluding deductions for interest and taxes.

Office Salaries Expense

The costs associated with paying salaries to administrative and office employees.