If Economic Profit Is Equal to Zero, Then

question 4

Multiple Choice

If economic profit is equal to zero, then

• A) the entrepreneur is earning only a normal profit.
• B) the entrepreneur's profit cannot be determined based on the information given.
• C) the entrepreneur's profit as measured by accountants is also equal to zero.
• D) the entrepreneur's profit as measured by accountants must be less than zero.

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Definitions:

Long-Lived

Pertaining to assets, it refers to items that are expected to provide economic benefits over a prolonged period, generally exceeding one year.

Normal Operations

The regular, day-to-day activities carried out by a business to generate revenue and profit.

Insurance Costs

Expenses incurred by individuals or companies for purchasing insurance coverage, which offers financial protection against losses.

Constructing a Building

The process of planning, designing, and overseeing the construction of a building, considered a capital investment for a business.