During Its Only Year of Operation,a Firm Collected $175,000 in Revenue

question 181

Multiple Choice

During its only year of operation,a firm collected $175,000 in revenue and spent $50,000 on raw materials,labor,and utilities.The owners of the firm spent $100,000 of their own money to build the firm's factory (instead of buying bonds and earning a 10% annual rate of return) ,which they sold at the end of the year for $100,000.The firm's economic profit is:

• A)$35,000.
• B)$125,000.
• C)$115,000.
• D)$25,000.

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Definitions:

Unaudited

Pertaining to financial statements or accounts that have not undergone a formal examination and verification by an accountant.

Errors And Omissions Policy

A type of professional liability insurance that protects companies and individuals against claims made by clients for inadequate work or negligent actions.

Professional Malpractice Policy

Insurance coverage designed to protect professionals against liability claims resulting from errors, omissions, or negligence in their professional service.

Registration Statements

Legal documents filed with the Securities and Exchange Commission that disclose important information required by law for public offerings of securities.