Dizzy Gives Out a Free T-Shirt to Every 100th Customer

question 178

Multiple Choice

Dizzy gives out a free T-shirt to every 100th customer entering the park.The cost of this T-shirt would best be described as a:

• A) fixed cost
• B) mixed cost
• C) step-variable cost
• D) true variable cost

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Definitions:

Amortized

The process of paying off a debt over time through regular payments, where part of each payment is applied to the principal amount and part to interest.

Equal Payments

Payments of the same amount made periodically over a certain period of time, often seen in loans or annuities.

Compounded Monthly

Interest calculation method where the interest is added to the principal balance monthly, leading to interest accruing on the previously accumulated interest.

Equal Monthly Payments

Equal monthly payments are fixed payments made each month on a loan or mortgage over a set period of time, designed to pay off both interest and principal gradually.