Question

How are profits calculated so they can be compared to the interest on a savings account?

O Total revenue less explicit costs
O Total revenue plus explicit costs
O Accounting profits divided by net worth
Normal profits plus economic profits

Answer 1

Profits are calculated by subtracting total revenue from explicit costs, and this can be compared to the interest on a savings account to determine the return on investment.

Step-by-step explanation:

Profits are calculated by subtracting total revenue from explicit costs. This can be compared to the interest on a savings account by looking at the return on investment. If the profits from a business are higher than the interest earned from a savings account, it indicates that the business is generating more income and is a better investment.

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