The Rule of 72 Is

question 47

Multiple Choice

The Rule of 72 is:

• A) A tool to determine the number of years until retirement for an employee
• B) Used to estimate how fast prices will double using a given annual inflation rate
• C) The legal code for requiring companies to provide a match on retirement savings
• D) Used to calculate interest rates for savings
• E) The number of steps required to complete a financial plan

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Definitions:

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, measuring the performance of a firm beyond its opportunity costs.

Economic Profit

Economic profit is the difference between a firm's total revenue and its total costs, including both explicit and implicit costs, representing the excess over the firm's opportunity costs.

Implicit Costs

The firm’s opportunity costs of using resources owned or provided by the owner.

Explicit Costs

Dollar costs incurred by business firms, such as wages, rent, and interest.