Which of the Following Is the Formula Used for Computing

question 101

Multiple Choice

Which of the following is the formula used for computing economic profits?

• A) economic profits = total revenue - implicit costs
• B) economic profits = total revenue - (implicit costs + explicit costs)
• C) economic profits = total costs - total revenue
• D) economic profits = total revenue - explicit costs

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Definitions:

Stockholders' Equity

Represents the residual value of assets minus liabilities, indicating the ownership interest of shareholders in a company.

Accounts Receivable

Company-expected payments for goods or services given to customers, pending settlement.

Inventory

Inventory encompasses the goods and materials a business holds for the purpose of resale or production.

Net Fixed Assets

Net Fixed Assets represent the total value of a company's property, plant, and equipment minus depreciation, indicating the actual value of a company's fixed assets.