Examlex
A company has an investment project that will cost $2 million today and yield a payoff of $3 million in 5 years. What interest rate represents the cutoff between profitability and nonprofitability for this project?
Accounting Profit
The total revenue of a firm minus the explicit costs directly associated with its operation, such as materials and labor, calculated according to standard accounting practices.
Implicit Cost
The opportunity cost equal to what a firm must give up in order to use resources it already owns for production, without direct payment.
Opportunity Cost
The loss of potential gain from other alternatives when one alternative is chosen.
Economic Profit
The difference between a firm's total revenues and its total costs, including both explicit and implicit costs.
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