Which One of the Following Statements Is NOT True About

question 66

Multiple Choice

Which one of the following statements is NOT true about amortization?

• A) Amortization refers to the way the borrowed amount (principal) is paid down over the life of the loan.
• B) With an amortized loan, each loan payment contains some payment of principal and an interest payment.
• C) With an amortized loan, a smaller proportion of each month's payment goes toward interest in the early periods.
• D) A loan amortization schedule is just a table that shows the loan balance at the beginning and end of each period, the payment made during that period, and how much of that payment represents interest and how much represents repayment of principal.

---

Definitions:

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced, illustrating how fixed costs per unit change with output levels.

MC

Marginal Cost, the cost of producing one additional unit of a good.

ATC

Average Total Cost, which is the total cost of production divided by the quantity of output produced.

AVC

Average Variable Cost; the per unit variable cost associated with producing a good or service.