Subtracting Nonoperating Expenses from Operating Income Yields

question 52

Multiple Choice

Subtracting nonoperating expenses from operating income yields:

• A)income tax expense
• B)profit before income taxes
• C)net income
• D)gross profit
• E)none of the above

---

Definitions:

Capital

Financial assets or the financial value of assets, such as cash and goods, used to generate wealth through investment.

Labor

Refers to human efforts used in the production of goods and services.

Cost Of Capital

The minimum profit percentage a corporation needs to achieve on its ventures to sustain its market value and draw in capital.

Cost Of Labor

The total sum of all compensation that a business must pay to its employees for a set period or on a given project.