Explicit Costs Would Include

question 211

Multiple Choice

Explicit costs would include:

• A) rent.
• B) the interest loss of the business owner on money withdrawn from his/her saving account and invested in the business.
• C) the loss of rent on a building the business owner owns and uses in his/her business.
• D) the opportunity costs of the business owner's time.
• E) the use of tools owned by the business owner and dedicated to the business.

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Definitions:

Shareholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, often referred to as stockholders' equity or owners equity.

Common Stock

A type of equity security that represents ownership in a corporation, granting holders a share of profits in the form of dividends and voting rights.

Paid-In Capital

The amount of money a company has received from shareholders in exchange for shares of stock, beyond the par value of the shares.

Basic Earnings

The amount of net income available to common shareholders, divided by the common shares outstanding, representing a straightforward measure of earnings without adjustment.