The Amount of Money That a Firm Pays to Buy

question 40

Multiple Choice

The amount of money that a firm pays to buy inputs is called

• A) total cost.
• B) variable cost.
• C) marginal cost.
• D) fixed cost.

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Definitions:

Specific Costs

Costs that can be directly attributed to a particular project, department, or activity.

Required Return

The minimum return that keeps an investor in a particular stock. Generally a function of the risk perceived in the investment.

Target Capital Structure

The ideal mix of debt, equity, and other financing sources a company aims to maintain over time.

Invested Funds

Money allocated by individuals or organizations to stocks, bonds, or other investments with the expectation of earning a return.