Normal Profit Is Defined as _____

question 21

Multiple Choice

Normal profit is defined as _____

• A)cost of production minus revenue from sales.
• B)economic profit plus accounting profit.
• C)the profit necessary to ensure that opportunity costs are covered.
• D)accounting profit minus economic profit.
• E)economic profit minus accounting profit.

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Definitions:

NPV

Net Present Value; a method used in capital budgeting to assess the profitability of an investment or project.

IRR

Internal Rate of Return, a financial metric used to evaluate the profitability of potential investments.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.

Tax Impact

The effect of taxation on an individual's or company's financial situation, including tax liabilities and planning.