Which of the Following Statements Is True Concerning Economic Profits

question 52

Multiple Choice

Which of the following statements is true concerning economic profits?

• A)They are always positive.
• B)They are equal to profits as measured by an accountant.
• C)They are always zero.
• D)They are revenue over and above all costs including implicit costs.

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Definitions:

Book Value Per Share

The financial measure that indicates the per-share value of a company, calculated by dividing total equity minus preferred stock by the number of outstanding shares.

Liquidated

The process of converting assets into cash, usually in the context of dissolving a business or paying off debt.

Balance Sheet

A financial statement that shows a company's financial position at a specific point in time, including assets, liabilities, and shareholder equity.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been deducted from revenues.