Variable Cost

question 113

Multiple Choice

Variable cost

• A) depends on the number of units produced.
• B) plus marginal cost equals fixed cost.
• C) is equal to total cost in deterministic models.
• D) is the same as average cost.

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Definitions:

Present Value

The present value of a future amount of money or series of payments, calculated based on a certain rate of return.

Initial Investment

The amount of money used to start a business or project.

Cash Operating Costs

The expenses a company incures during its day-to-day operational activities, usually excluding non-cash costs like depreciation.

Current Salvage Value

The estimated value that an asset can be sold for at the end of its useful life in its present condition.