If an Investment Project Would Make Use of Land Which

question 86

Multiple Choice

If an investment project would make use of land which the firm currently owns,the project should be charged with:

• A)a sunk cost.
• B)an opportunity cost.
• C)amortization.
• D)interest.
• E)abuse of power.

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Definitions:

Marginal Revenue

The additional income earned from selling one more unit of a product or service.

MR = MC

An economic principle stating that profit maximization occurs when marginal revenue equals marginal cost.

Profits

The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain those activities.

Economic Effects

The influence of various factors, including policies, market shifts, and external events, on the economy's performance, structure, and behavior.