A Firm's Net Worth Is Calculated as

question 139

Multiple Choice

A firm's net worth is calculated as

• A)the difference between a firm's revenues and explicit costs.
• B)the difference between a firm's revenues and implicit costs.
• C)the difference between a firm's assets and liabilities.
• D)the difference between a firm's liabilities and outstanding equities.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, contributing to covering fixed expenses and profit.

Variable Expenses

Expenditures that change in direct relation to production levels or sales quantities.

Mixed Cost

A cost composed of a mixture of fixed and variable components. Costs are fixed for a set level of production or consumption, becoming variable with further production or consumption.

Fixed Expenses

Regular expenses that do not vary in total over a wide range of activity levels.