ECONOMICS
TECHNOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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rent
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wages
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interest
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profit
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Detailed explanation-1: -As wages are being paid for services of labor, interest is paid for the services of capital, rent is paid for the services provided by the land or other immovable assets and profit is for the factor of payment to entrepreneurship.
Detailed explanation-2: -Answer and Explanation: The price paid for the use of capital is c. interest.
Detailed explanation-3: -A capital interest is an interest based on the current value of a company. For example, if the company were to liquidate soon after the grant of capital interest was made, then the grantee would be entitled to a share of the proceeds from the liquidation.
Detailed explanation-4: -Interest on capital is an expense to the firm and is debited to the profit and loss appropriation account.