Asked by michelle hopkins on May 01, 2024

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​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.
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Zybrea KnightMay 05, 2024
Final Answer :
C
Explanation :
Accounting profit includes explicit costs such as interest payments, costs paid to suppliers, and depreciation expenses. However, it does not include implicit costs like the opportunity cost of capital, which is considered in the calculation of economic profit instead.