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In the Ames room illusion, an observer is required to look through the peephole with just one eye because:
Fixed Costs
Costs that do not change with the level of output or sales, such as rent or salaries, remaining constant regardless of business activity.
Marginal Costs
The cost added by producing one additional unit of a product or service.
Net Present Value
A calculation used to assess the value of future cash flows in today's dollars, considering the time value of money.
Cost of Capital
The cost of funds used for financing a business, typically expressed as an annual percentage, including the cost of equity and debt.
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