Which of the Following Is True

question 264

Multiple Choice

Which of the following is true?

• A) Profit as calculated by accountants and economic profit are not necessarily equal.
• B) Profit as calculated by accountants is always smaller than economic profit.
• C) Economic profit ignores implicit costs.
• D) The Internal Revenue Service taxes the firm's economic profit but not its normal profit.
• E) The Internal Revenue Service taxes the firm's normal profit but not its economic profit.

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Definitions:

Public Offering

The process of selling new issues of securities to the public, typically through the issuance of stocks or bonds.

Securities

Tradable assets indicating an equity stake in a company available on the public market, a lending relationship with either a governmental agency or a corporation (bond), or the rights to own shares as depicted by an option.