Which of the Following Costs Exhibits Both Decreasing and Increasing

question 83

Multiple Choice

Which of the following costs exhibits both decreasing and increasing marginal costs over a specific range of activity?

• A) Semivariable cost.
• B) Curvilinear cost.
• C) Step-fixed cost.
• D) Step-variable cost.
• E) Fixed cost.

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Definitions:

Minimum Operating Lease Payments

The minimum amount that a lessee is obligated to pay over the lease term for the right to use an underlying asset, excluding costs such as maintenance and taxes that are paid by the lessee.

Sales-Type Lease

A lease agreement in which the lessor recognizes immediate profit on the leased asset, as if it were sold, typically used in capital leasing.

Operating Lease

A contract allowing the use of an asset without transferring ownership rights, typically with shorter terms than a finance lease.

Implicit Interest Rate

This reflects the cost of borrowing, calculated from the lease terms, used to measure the present value of lease payments.