An Example of a Discretionary Fixed Cost Would Be

question 26

Multiple Choice

An example of a discretionary fixed cost would be:

• A)taxes on the factory.
• B)depreciation on manufacturing equipment.
• C)insurance.
• D)research and development.

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Definitions:

Capital Gain

The increase in value of an asset or investment from its purchase price to its selling price.

Net Investments

The total amount spent by a company or economy on capital assets, minus depreciation, indicating the addition to the overall productive capacity.

Leverage Ratio

A financial metric used to measure a company's debt levels relative to its equity or assets.

Interest-Burden Ratio

A financial metric that measures the proportion of a company's earnings before taxes that is consumed by interest expenses.