Asked by Nicole Macario on Jun 29, 2024
Verified
Which of the following best describe the term fixed costs.
A) The percentage change in operating cash flow relative to the percentage change in quantity sold.
B) The sales level that results in a zero NPV.
C) Costs that do not change when the quantity of output changes during a particular time period.
D) The possibility that errors in projected cash flows lead to incorrect decisions.
E) Opportunities that managers can exploit if certain things happen in the future.
Fixed Costs
Costs that do not vary with the level of production or business activity.
Quantity of Output
The total amount of goods or services produced by a company, sector, or economy within a specified period.
Costs
The expenditure incurred by a business in the process of producing or providing goods or services.
- Understand the concept and implications of fixed and variable costs in business operations.
Verified Answer
EM
Erica MohlerJun 30, 2024
Final Answer :
C
Explanation :
Fixed costs are expenses that do not vary with the level of output or production in the short term. These costs are incurred regardless of how much or how little a company produces, making option C the correct description.
Learning Objectives
- Understand the concept and implications of fixed and variable costs in business operations.