Which Statement About Net Profit Is Not True

question 27

Multiple Choice

Which statement about net profit is not true?

• A)Net profit normally represents the amount of cash generated from operations for the period.
• B)Net profit is a measure of achievement or productive effort.
• C)Net profit increases equity.
• D)None of the statements, i.e., all are true.

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Definitions:

Reserve Price

A reserve price is the minimum price a seller is willing to accept for an item at auction; if bids do not reach this price, the item is not sold.

Private Values

A situation in auctions where the value of an item is known only to the bidder, not affecting the valuation of the item by other bidders.

Dutch Auction

An auction mechanism where the price starts high and decreases until a bidder accepts the price, securing the sale.

Rational Bidders

Individuals who participate in auctions or bidding processes and make decisions based on maximizing their utility.