Question

How does looking at the formula Profit = Revenue − Cost help company leaders make decisions?

A) By calculating the money left over after spending all of the company profits.
B) By highlighting the need to increase revenue or decrease costs in order to improve profits.
C) By determining the total cost of completing a project, including the price of materials and labor.
D) By showing the benefits of increasing profits, such as increased employee salaries.

Answer 1

The formula Profit = Revenue - Cost helps company leaders make decisions B) by highlighting the need to increase revenue or decrease costs in order to improve profits.

Step-by-step explanation:

The formula Profit = Revenue - Cost helps company leaders make decisions by highlighting the need to increase revenue or decrease costs in order to improve profits.

It shows the relationship between revenue, cost, and profit, and serves as a guide for determining how changes in these factors can affect the overall profitability of a company.

Company leaders can analyze the formula to identify areas where revenue can be increased or costs can be reduced, leading to better decision-making and improved financial performance.