The 'Theory of the Business' (Drucker 1995) Consists Of: Please

question 30

Multiple Choice

The 'theory of the business' (Drucker 1995) consists of: Please select all that apply.

• A) An organization's assumptions
• B) An organization's decisions
• C) The environmental conditions in which the organization operates
• D) The desires of the organization's customers

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Definitions:

Implicit Cost

Costs that represent the loss of potential gain from using assets in an alternative option rather than in their current use.

Implicit Costs

The opportunity costs of resources that are owned by the firm and used in production, not involving direct payment of money but affecting the firm's profitability.

Explicit Costs

Direct payments made to others in the course of running a business, such as wages, rent, and materials.

Accounting Profits

The net earnings of a company as calculated by subtracting total expenses from gross revenue, according to accepted accounting principles.