Case 3 Matthew Has His New Computer System in Place

question 111

Multiple Choice

Case 3 Matthew has his new computer system in place and is ready to have an Internet connection. He is overwhelmed by the variety of choices for home Internet connections. For instance, he could choose to connect using an existing telephone line or dial-up connection. He could also use a cable modem, ISDN (Integrated Services Digital Network) , DSL (Digital Subscriber Line) , or satellite Internet service. Which Internet connection is simplest and least expensive for Matthew because the necessary equipment and software are preinstalled on most new computers?

• A) cable modem
• B) dial-up
• C) DSL (Digital Subscriber Line)
• D) DSS (Digital Satellite Service)

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Definitions:

Annual Fixed Expenses

Expenses that do not change in total regardless of changes in the volume of activity or production levels, such as rent or salaries.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, showing how much contributes to covering fixed costs and earning profit.

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in no net profit or loss.

Fixed Expenses

Costs that do not fluctuate with the level of production or sales, such as rent, salaries, and insurance premiums.