In Calculating Accounting Profit, Accountants Typically Don't Include

question 483

Multiple Choice

In calculating accounting profit, accountants typically don't include

• A)long-run costs.
• B)sunk costs.
• C)explicit costs of production.
• D)opportunity costs that do not involve an outflow of money.

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Definitions:

Interest

A financial expense for accessing borrowed capital, customarily indicated by an annual rate in percentage.

Investment

The act of allocating funds into ventures with the intention of gaining financial returns or tangible outcomes.

Compounded Quarterly

Interest on an investment or loan that is calculated four times a year, adding each interest payment to the principal for future interest calculations.

Maturity Value

The amount payable to an investor at the end of a fixed-term investment including the principal and the interest.