Which of the Following Expressions Is Correct

question 54

Multiple Choice

Which of the following expressions is correct?

• A)accounting profit = economic profit + implicit costs
• B)accounting profit = total revenue − implicit costs
• C)economic profit = accounting profit + explicit costs
• D)economic profit = total revenue − implicit costs

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Definitions:

Present Value

The immediate financial value of a future cash sum or succession of cash inflows, evaluated with a specified return rate.

Expected Cash Flows

Forecasted cash inflows and outflows for a business or project, often used in financial modeling to evaluate investment viability.

Yield to Maturity

The total return anticipated on a bond if it is held until the date it matures.

Premium

An amount paid that is above the standard or nominal cost, often for insurance, superior goods, or to designate a higher level of service or coverage.