There Are Three Basic Ingredients in Profitability: Investment, Revenue, and Debt

question 16

True/False

There are three basic ingredients in profitability: investment, revenue, and debt.

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Definitions:

Profits of Industry

The total earnings of companies within a specific sector after subtracting costs and expenses.

Resources Employed

Refers to the allocation and utilization of resources such as labor, capital, and materials to produce goods and services.

Output of Industry

The total amount of goods and services produced by an industry or sector within a specific period, often used to gauge economic health and productivity.

Economic Profit

The difference between total revenues and total costs, taking both explicit and implicit costs into account, indicating the additional income over the opportunity cost of capital.