Transactions Costs Refer to

question 106

Multiple Choice

Transactions costs refer to

• A)the implicit costs of production.
• B)the costs in time and other resources that parties incur in the process of agreeing to and carrying out an exchange of goods or services.
• C)the raw material cost of production.
• D)the cost of transporting goods from one destination to another.

Understand and calculate economic value added (EVA) and its significance for corporate performance.

Recognize the implications of investment decisions on financial performance indicators.

Understand the principles of performance evaluation and the role of controllable versus non-controllable factors.

Differentiate between intrinsic and extrinsic rewards and understand their impact on motivation.

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Definitions:

Marble

A metamorphic rock composed of recrystallized calcite or dolomite.

Quartzite

A very hard rock consisting chiefly of quartz grains joined by secondary silica that causes the rock to break across rather than around the grains; formed by metamorphism or by silica cementation of a quartz sandstone.

Slate

A compact, fine-grained, low-grade metamorphic rock that possesses slaty cleavage.

Hornfels

Hornfels is a metamorphic rock formed by the contact between mudstone or other clay-rich rock and a hot igneous body, characterized by its hardness and fine grain.