Which of the Following Statements Is Correct

question 21

Multiple Choice

Which of the following statements is correct?

• A)Total fixed costs are equal to revenue plus variable cost per unit times the quantity produced.
• B)Profit is equal to total fixed costs plus revenue.
• C)Total fixed costs are equal to profit minus revenue.
• D)Profit is equal to revenue minus total variable costs minus total fixed costs.

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Definitions:

Internal Rate of Return

A financial metric used to estimate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows equal to zero.

Erosion

In finance, erosion refers to the gradual reduction of assets, earnings, or investment value over time.

Future Cash Flows

Predicted income or expenses expected to be generated or incurred in the future.

Present Value

Present value is a financial concept that calculates the current worth of a future sum of money or stream of cash flows given a specified rate of return.