An Example of an Explicit Cost of Production Would Be

question 5

Multiple Choice

An example of an explicit cost of production would be

• A)the cost of forgone labor earnings for an entrepreneur.
• B)the lost opportunity to invest in capital markets when the money is invested in one's business.
• C)lease payments for the land on which a firm's factory stands.
• D)Both a and c are correct.

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Definitions:

Leverage

A means of gaining a strategic advantage through the use of a particular resource or capability.

Profitability

The state or condition of yielding financial profit or gain, typically measured over a specific period of time.

Use Of Debt

The practice of borrowing funds to finance activities, investments, or purchases, often as a strategic financial decision.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.