Asked by michelle hopkins on May 01, 2024
Verified
All of the following costs are included in the calculation of accounting profit,except
A) Interest payments on borrowed funds
B) Costs paid to suppliers for product ingredients
C) Opportunity cost of capital
D) Depreciation expenses related to investments in buildings and equipment
Accounting Profit
The total revenue of a business minus its explicit costs, not including opportunity costs.
Opportunity Cost
The opportunity cost of an alternative is the profit you give up to pursue it.
Interest Payments
The amount paid by a borrower to a lender as compensation for the use of borrowed funds, usually calculated as a percentage of the principal amount.
- Identify the distinctions between financial profits in accounting and profits in economics.
Verified Answer
Learning Objectives
- Identify the distinctions between financial profits in accounting and profits in economics.
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