Gross Profit Is

question 113

Multiple Choice

Gross profit is:

• A) The same as net income.
• B) Subtracted from operating income to get net income.
• C) Net sales less cost of goods sold.
• D) A special general ledger account.
• E) Only calculated when using the perpetual inventory system.

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Definitions:

Internal Rate of Return

This is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Payback Period

The length of time it takes for an investment to recover its initial expenditure from the cash inflows that it generates.

After-Tax Discount Rate

The rate used to discount future cash flows to their present value, adjusted for the impact of taxes.

Income Tax Rate

The percentage of taxable income that individuals or corporations are required to pay to the government.