Suppose That a College Student Receives an Offer for a Summer

question 27

Multiple Choice

Suppose that a college student receives an offer for a summer internship with a stock brokerage firm. Unfortunately for the student, the internship is unpaid. Is it ever economically beneficial to accept an unpaid job?

• A)Yes, because the experience gained during the internship would increase the student's human capital.
• B)No, because the opportunity cost is too high.
• C)No, because the student is signaling to future employers that he or she is willing to accept low wages.
• D)Yes, because accepting an unpaid job signals to future employers that the student has stable personal finances.

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Definitions:

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization, a measure of a company's operating performance.

Revenue

The total amount of money generated from the sale of goods, services, or any other use of capital or assets, before any expenses are deducted.

Inventory Level

The number of units of products or materials that are kept in stock by a business.

Period Cost

Costs that are taken directly to the income statement as an expense in the period in which they are incurred, not directly tied to the production of inventory.