Mike Wants to Set Up a Factory to Manufacture Roller

question 105

Multiple Choice

Mike wants to set up a factory to manufacture roller skates.He plans to employ a hundred people in his factory.Mike's primary expenses include rent, utilities, insurance, administrative salaries (for executives and higher-level managers) , and depreciation of the physical plant and equipment.The expenses for raw material and labour to make the skates constitute the:

• A)standard costs.
• B)variable costs.
• C)rebate.
• D)improvement value.
• E)fixed costs.

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Definitions:

Performance Evaluation

The process of examining how well investments or portfolios have done over a period, comparing their returns against benchmarks or objectives.

Survivorship Bias

The analytical error of focusing only on entities that have "survived" a selection process, ignoring those that have failed.

Infrequently-Traded Assets

Assets that do not trade on a regular basis on the secondary market, making their valuation and liquidity different from frequently traded assets.

Liquidity Premiums

Additional returns investors demand for holding securities that are not easily convertible to cash without a loss in value.