Recall the Application About Running a Lawn-Cutting Business Using Solar-Powered

question 86

Multiple Choice

Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s) .
-Using figures from the Application,$5,000 (which is the market value of all your equipment) is the

• A) invested capital.
• B) opportunity cost of the invested capital.
• C) the opportunity cost of running the business.
• D) opportunity cost of your time.

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Definitions:

Variable Cost Ratio

The proportion of variable costs to sales revenue, indicating how much variable cost changes with a change in the company's production volume.

Fixed Costs

Fixed costs, including rent, wages, and insurance expenses, stay the same no matter the production or sales volume.

Debt

An amount of money borrowed by one party from another, to be paid back with interest.

Shareholder Value

The worth delivered to shareholders due to management's ability to grow sales, earnings, and dividends over time.