Economists Also Refer to the Normal Rate of Return on Investment

question 247

Multiple Choice

Economists also refer to the normal rate of return on investment as

• A) a residual cost.
• B) the opportunity cost of capital.
• C) the equity kicker.
• D) the fixed cost of entrepreneurship.

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Definitions:

Direct Material

Represents raw materials that can be directly attributed to the production of specific goods, directly affecting the finished product's cost and quality.

Units

A measure or quantity used as a standard of measurement for expressing amounts, especially in the context of production or inventory.

Materials Price Variance

The financial difference between the actual cost of materials and the expected (standard) cost, indicating cost management efficiency.

Direct Material

Materials that can be directly associated with the production of goods, directly entering into and being a significant component of the finished product.