Higher capital utilization rates may raise user costs of capital because higher utilization rates may imply:
A)less highway congestion.
B)paying overtime to employees operating the machines.
C)off peak utility prices.
D)all of the above.

Question

Quizplus · Accepted Answer

Higher capital utilization rates may require the use of overtime pay for employees who operate the machines. This increases the user costs of capital, as the cost of labor is factored into the cost of using the capital asset. Choices A and C are not relevant to the question.

Higher Capital Utilization Rates May Raise User Costs of Capital