Which of the Following Is True If the Opportunity Cost

question 34

Multiple Choice

Which of the following is true if the opportunity cost of producing a particular good is less than its accounting profit?

• A)Economic profit is zero.
• B)Economic profit is negative.
• C)Economic profit is positive.
• D)Economic profit cannot be determined.

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Definitions:

Net Cash Flow

The amount of cash generated or lost over a specific period, considering cash inflows and outflows.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decline in its value due to wear and tear.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, culminating in net profit or loss.

Fixed Assets

Physical assets with a useful life greater than one year, which are used in the operations of a business, such as machinery or buildings.