If a Firm Has Revenues of $200, Explicit Costs of $100

question 95

Multiple Choice

If a firm has revenues of $200, explicit costs of $100, and implicit costs of $100, then its accounting profit is:

• A) $0.
• B) $50.
• C) $100.
• D) $500.

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Definitions:

Net Cash Flow

The amount of cash generated or used by a company in a given period, calculated as cash inflows minus cash outflows.

Capital Investment

Funds spent by a company to purchase, maintain, or improve physical assets such as property, industrial buildings, or equipment.

Quantitative Measures

Metrics or data points that can be quantified numerically to assess performance, trends, or changes over time.

Asset Purchases

Transactions involving the acquisition of physical or intangible assets that are expected to generate economic benefits for the business.