Select the One Cost That Is Not Involved in Home

question 192

Multiple Choice

Select the one cost that is not involved in home ownership.

• A) down payment
• B) closing/settlement costs
• C) rental deposit
• D) points/discount points
• E) loan origination fee

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs for raw materials or production costs.

Fixed Costs

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

Incremental Cash Flow

The additional cash flow from taking on a new project, calculated as the difference between the project's cash flows if the project is taken versus if it is not.

Incremental Cash Flow

The additional cash flow a company receives from undertaking a new project, considering the revenue and costs involved.