Which of the Following Statements Regarding Investment Is Correct

question 24

Multiple Choice

Which of the following statements regarding investment is correct?

• A)Housing construction is classified as investment expenditure rather than consumption expenditure.
• B)Rental payments are included as investment expenditures.
• C)Depreciation refers to funds used to increase the existing stock of capital.
• D)The capital stock includes investment in stocks and bonds.
• E)The accumulation of inventories does not count as current investment.

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Definitions:

Units Produced

The total number of units created by a production process over a specific period of time.

Break Even

The point at which total revenues equal total costs, resulting in neither profit nor loss.

Common Fixed Expenses

Common fixed expenses are costs that remain constant for a given period regardless of the level of production or sales, and are shared among multiple product lines or departments within a company.

CM Ratio

The contribution margin ratio, representing the portion of sales that contributes to covering fixed costs after variable costs have been paid.