Adam Spent $10 000 on New Equipment for His Small

Multiple Choice

Adam spent $10 000 on new equipment for his small business, 'Adam's Fitness Studio.' Membership at his fitness centre is very low and at this rate, Adam needs an additional $12 000 per year to keep his studio open.Which of the following is true?

A) The fixed cost of running the studio is $22 000.
B) The variable cost of running the studio is $22 000.
C) The $10 000 Adam spent on equipment is a fixed cost of business, and the $12 000 he'll need to continue operations is a variable cost.
D) The $10 000 Adam spent on equipment is the total cost of starting the business, and the $12 000 he'll need to continue operations is a marginal cost.