A Bus Is Mostly Filled with Passengers and Ready to Travel

question 108

Multiple Choice

A bus is mostly filled with passengers and ready to travel from Los Angeles to San Francisco. At the last minute, a person comes running up to the bus and takes a seat. The change in the bus company's total cost as a result of transporting one more passenger on this trip is called:

• A) marginal cost.
• B) average total cost.
• C) variable cost.
• D) fixed cost.

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Definitions:

Working Capital

An indicator of a company's short-term financial health and operational efficiency, calculated as current assets minus current liabilities.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows or to evaluate the attractiveness of an investment.

Net Present Value

A valuation method that calculates the present value of an investment's expected cash flows, minus the initial investment cost.

Diagnostic Computer

A computer system or software used to read and diagnose faults in various systems, often utilized in automotive, computer, and industrial settings.