Cool Runnings Operates a Chain of Frozen Yogurt Shops

question 76

Multiple Choice

Cool Runnings operates a chain of frozen yogurt shops.The company pays $5,000 of rent expense per month for each shop.The managers of each shop are paid a salary of $3,000 per month and all other employees are paid on an hourly basis.Relative to the number of shops,the cost of rent is which kind of cost?

• A) Variable cost
• B) Fixed cost
• C) Mixed cost
• D) Opportunity cost

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Definitions:

Desired Investment

The level of investment that firms plan or wish to undertake based on their expectations of future economic conditions.

Interest Rate

The interest rate is the percentage charged on the total amount lent or paid on invested funds, typically expressed on an annual basis.

Loanable Funds

Money available for borrowing, which is determined by the savings in the economy plus the money provided by banks and other financial institutions.

Interest Rate

The requisition, as a percentage of the principal, placed by lenders on borrowers for asset use.