Costs incurred and non-convertible during the time period under consideration shall be known as _______.
- AOption (a)
marginal costs
- BOption (b)
fixed costs
- COption (c)
average cost
- DOption (d)
total costs
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Correct answer
fixed costs
Why this answer is correct
Solution-
- The term fixed cost refers to a cost that does not change with an increase or decrease in the number of goods or services produced or sold.
- Fixed costs are expenses that are paid by a company, independent of any specific business activities. This means that fixed costs are generally indirect, in that they do not apply to a company's production of any goods or services.
- Costs incurred and cannot be changed during the time period under consideration are known as fixed costs.
Important Points
- Non-convertible debentures (NCDs) are fixed-income instruments, usually issued by highly-rated companies, in the form of public issues to accumulate long-term capital appreciation. They offer relatively higher interest rates as compared to convertible debentures.
- FC (Fixed Cost) is the cost incurred on FOP which is fixed in nature. These include different types of capital such as buildings and machines. These costs cannot change with different levels of production and are not zero even when the production process is stopped. These costs cannot be set aside in the long run.