The Amount of Value Created by a Firm Is Measured

question 138

Multiple Choice

The amount of value created by a firm is measured by:

• A)calculating the difference between the previous year's profitability and the current year's profitability.
• B)dividing the market price of its products by the price that customers are actually willing to pay.
• C)estimating the difference between its costs of production and the value that consumers perceive in its products.
• D)dividing the net profits of the firm by total invested capital.

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Definitions:

Legally Sufficient Consideration

An element of contract law that requires something of value to be exchanged between the parties involved.

Consideration

Something of value (such as money, services, or goods) that is exchanged between parties in a contract, rendering the agreement legally binding.

Legally Sufficient Consideration

In contract law, it refers to something of value that is exchanged between the parties, supporting a binding agreement.

Forbearance

The act of refraining from exercising a legal right; an agreement between a lender and a borrower in which the lender agrees to temporarily cease requiring mortgage payments, to delay foreclosure, or to accept smaller payments than previously scheduled.