You Own a Business That Answers Telephone Calls for Physicians

question 169

Multiple Choice

You own a business that answers telephone calls for physicians after their offices close. You have an incentive to substitute capital for labor if the

• A) price of capital increases.
• B) price of labor decreases.
• C) price of capital decreases.
• D) marginal product of labor increases.

---

Definitions:

Payback Period

The period of time required for an investment to generate cash flows sufficient to recover its initial cost.

Factory Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor costs.

Depreciation

The methodical distribution of the expense of a physical asset throughout its lifespan.

Payback Period

A financial metric that calculates the time required for an investment to generate cash flows sufficient to recover the initial investment cost.