Which of the Following Are Correct Statements About Implicit and Explicit

question 63

Multiple Choice

Which of the following are correct statements about implicit and explicit costs? i. Normal profit is an implicit cost.
Ii) Economic depreciation is an explicit cost.
Iii) Wages are an explicit cost.

• A) i and iii
• B) ii and iii
• C) i, ii and iii
• D) iii only
• E) i only

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Definitions:

Preference Shares

Shares that give their holders priority over common stockholders in terms of dividend payments and asset liquidation.

Liquidation

The process of winding up a company's affairs by selling off its assets to pay creditors.

Corporation Act

Legislation that governs the behavior of corporations, detailing the legal requirements for forming, operating, and dissolving a corporation.

Voluntary Winding Up

The process of liquidating a company's assets and ceasing operations based on the decision of its shareholders or members, rather than by order of a court.