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Federal government guidelines require that a test be
Implicit Costs
The opportunity costs that arise from using resources that could have been employed in an alternative use but were instead utilized in the current operation without direct payment.
Explicit Costs
Direct, out-of-pocket payments for goods and services used in the production of a product or provision of a service.
Accounting Profit
The difference between total monetary revenue and total monetary costs, excluding the consideration of opportunity costs.
Explicit Costs
These are the direct, clear expenses related to business operations, such as salaries, utilities, and rent, that are easily quantifiable.
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