Which of the following is an example of a fixed expense?

A fixed expense is a cost that remains constant over time, typically not varying month to month, and is often contractual in nature. Rent or a mortgage payment is a prime example of a fixed expense because it usually involves a set amount that is owed each month for the use of housing. This amount does not fluctuate based on usage or the tenants' spending habits, making it predictable and straightforward to budget for.

In contrast, utilities bills can vary based on usage, such as electricity or water, making them less predictable. Groceries also fluctuate based on individual consumption patterns and spending choices, so they cannot be classified as fixed expenses. Similarly, entertainment costs can vary greatly each month depending on activities or events one chooses to engage in, which also makes them variable expenses rather than fixed. Thus, the constant nature of rent or mortgage payments firmly categorizes it as a fixed expense.