Stan owns a software design business. He obtained a bank loan to buy computer equipment for his ...

Stan owns a software design business. He obtained a bank loan to buy computer equipment for his business. He pays $1,000 per month for interest on the loan. He has 10 employees, each of whom is paid $4,000 per month. Because his business has been successful, next month he will increase employee wages to $5,000. If the revenue from his business remains at its current level, Stan is considering an addition to his office. Which of the following statements regarding Stan's business is false?

• The payments Stan makes to his employees are variable costs and explicit costs.

• The monthly payment Stan makes for his bank loan is an implicit cost.

• The monthly payment Stan makes for his bank loan is a fixed cost.

• The addition Stan is considering to make to his office would be an implicit cost.