BNN Corporation Expects to Operate at a Profit in Its

question 103

Multiple Choice

BNN Corporation expects to operate at a profit in its next fiscal year. Which of the following statements about its budgeted income statement is true?

• A) Operating expenses are expected to be greater than gross profit.
• B) Operating income is expected to be greater than net income.
• C) Net income is expected to be greater than operating income.
• D) Gross profit minus operating expenses will equal net income.

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Definitions:

Private Cost

The cost incurred by an individual or company in producing goods or services, excluding externalities.

Private Value

The value of a good or service to an individual buyer or seller which is independent of the market price or the value others might derive from it.

Externalities

Results of business activities on external entities not considered in the product or service's price.

Cars And Trucks

General categories of motor vehicles primarily used for transportation of people (cars) and goods (trucks).