Interest Is Considered A(n)

question 15

Multiple Choice

Interest is considered a(n)

• A) explicit cost when the firm pays a bank to borrow money.
• B) implicit cost when the firm owner uses his or her own funds to buy capital.
• C) return to entrepreneurship if the firm owner uses her own funds to buy capital.
• D) form of depreciation if the cost of borrowing increases.
• E) Both answers A and B are true.