The Cost of Software and Hosting in the BVI Equation

question 17

Multiple Choice

The cost of software and hosting in the BVI equation is which of the following?

• A)Substantially high.
• B)Assumed to be zero.
• C)Typically greater than the employee hourly wage of the blogger.
• D)Typically a bit less than the employee hourly wage of the blogger.
• E)Added on to the final BVI calculation.

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Definitions:

Incremental Revenue

The additional revenue generated from a specific action or decision, beyond what would have been generated without it.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor.

Fixed Cost

A fixed cost is an expense that does not change with the level of goods or services produced by a business, such as lease payments or insurance premiums.

Sunk Cost

A sunk cost is a past expense that has already been incurred and cannot be recovered. Businesses cannot alter these costs with future decisions.