Recall the Application About the Costs Involved in Opening a Dunkinʹ

question 126

Multiple Choice

Recall the Application about the costs involved in opening a Dunkinʹ Donuts shop to answer the
following question(s) .
-Recall the Application. The $40,000 franchise fee is a:

• A)fixed cost.
• B)variable cost from the point of view of the franchise.
• C)part of the franchiseʹs short run profit.
• D)part of the franchiseʹs total revenue.

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Definitions:

Yield to Maturity

The total return anticipated on a bond if held until it matures, including both interest payments and the appreciation or depreciation of the bond's value.

Coupon Rate

The interest rate stated on a bond or other fixed income security that the issuer promises to pay annually or semi-annually.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date, at a specified call price.

Market Interest Rate

The prevailing rate of interest available in the marketplace on comparable debt instruments, influencing the rates borrowers pay and lenders receive.