What Do a Movie Theater, an Automated Car Wash, and Electric

question 185

Multiple Choice

What do a movie theater, an automated car wash, and electric utilities have in common?

• A) They are all tangible services.
• B) They are all people-based services.
• C) None of them has problems with idle production capacity.
• D) They never use off-peak pricing.
• E) They are all equipment-based services.

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Definitions:

Market Rate

The prevailing rate at which goods, services, or securities are bought and sold in the market.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Amortization

The gradual reduction of a debt or the spreading out of capital expenses for intangible assets over a specific period of time.

Bond Payable

A bond payable is a long-term liability where a borrower agrees to pay back a fixed amount of funds at a future date, along with periodic interest payments.