Which of the Following Best Defines the Term 'Economic Profit

question 5

Multiple Choice

Which of the following best defines the term 'economic profit'?

• A) The amount earned by a business after deducting all operating expenses and a charge for the opportunity cost of the capital employed
• B) The amount earned by a business over a number of years: it is equal to the cumulative profit less interest plus depreciation
• C) The rate of return earned by a business on sales over a period
• D) The amount earned by a business as shown in the profit and loss account but with depreciation and any increase in working capital added back

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