Which of the Following Is an Example of an Implicit

question 72

Multiple Choice

Which of the following is an example of an implicit cost?

• A) Interest paid to a bank on a building loan.
• B) Liability insurance payments made only once a year.
• C) The cost of using capital an owner donates to the business.
• D) Dollars paid to a supplier for materials used in production.
• E) Wages paid to employees.

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Definitions:

Strategic Business Unit

A semi-autonomous division or unit within a company that focuses on a specific market or product line, with its own strategy and objectives.

Board of Directors

A group of individuals elected to represent shareholders and govern the activities of a corporation.

Government Agencies

Official organizations operated by the government to implement laws, provide services, and oversee various areas of public interest and policy.

Industry

A group of companies or businesses that produce or sell similar products or services.