An Input Whose Cost Is Based on a Flat Fee

question 20

Multiple Choice

An input whose cost is based on a flat fee and use is a

• A) Fixed cost
• B) Variable cost
• C) Step cost
• D) Variable cost with fixed component

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Definitions:

Future Value

Future value is the value of a current asset at a specified date in the future based on an assumed rate of growth over time.

Present Value

The current worth of a future sum of money or cash flows, given a specified rate of return.

Interest Rate

The percentage of a sum of money charged for its use, indicating the cost of borrowing or the return on savings.

Present Value

The current financial value of a future financial sum or sequences of payments, assessed with a predefined rate of earnings.