Which of the Following Is Not Considered to Be a Transaction

question 45

Multiple Choice

Which of the following is not considered to be a transaction cost?

• A)the commission paid to a broker
• B)a dealer's bid-ask spread
• C)the time it takes you to research the asset you want to buy or sell
• D)any taxes you must pay on the purchase or sale of the asset

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Definitions:

Total Cash Flows

The aggregate sum of cash entering and leaving a corporation, which plays a significant role in determining its financial fluidity.

Income Taxes

Taxes levied on both earned income (wages, salaries) and unearned income (dividends, interest), imposed by government authorities.

Sunk Cost

A cost that has already been incurred and cannot be recovered, and should not affect future investment or spending decisions.

Capital Budgeting

The process used by businesses to evaluate and prioritize investments in long-term assets and projects based on their potential returns.