Which of the Following Is an Implicit Cost to the Johnston

question 37

Multiple Choice

Which of the following is an implicit cost to the Johnston Manufacturing Company?

• A)payments of wages to its office workers
• B)property taxes
• C)rent paid for the use of equipment owned by the Schultz Machinery Company
• D)returns that the shareholders could have received if they had not bought shares in the Johnson Manufacturing Company
• E)payments made for its purchases of electrical power

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Definitions:

Collateral

Assets pledged by a borrower to secure a loan or credit, which can be seized by the lender if the borrower fails to make payments.

Creditor

An individual or organization to whom money is owed by a debtor.

Co-Sign

To sign a legal document alongside another person, often agreeing to take responsibility if the primary signer fails to meet the terms.

Credit Application

A form or request submitted by an individual or business seeking to obtain credit from a lending institution.