Which of the following best describes the interest paid on a bank loan by a local ice cream producer?
A) It is not considered by an economist when calculating the cost of running the ice cream business.
B) It is an implicit cost for the ice cream producer.
C) It is an explicit cost for the ice cream producer.
D) It is not considered by an accountant when calculating the cost of running the ice cream business.

Question

Quizplus · Accepted Answer

Interest paid on a bank loan is an explicit cost for the ice cream producer as it involves a direct cash outflow from the business for financing purposes.

Which of the Following Best Describes the Interest Paid on a Bank