Question

In Five Below's 2021 fiscal year, what is the amount of cashflow that was provided by its operating activities?

a)$278,810,000
b)$327,912
c)$203,810,000
d)$327,912,000"

Answer 1

The firm's accounting profit is calculated by subtracting the total expenses of $950,000 from the total sales revenue of $1 million, resulting in an accounting profit of $50,000.

Step-by-step explanation:

To calculate the accounting profit, we need to subtract the total expenses from the total sales revenue. In the scenario given, a firm had sales revenue of $1 million and incurred expenses which included $600,000 on labor, $150,000 on capital, and $200,000 on materials. The accounting profit can be calculated as follows:

• Sales Revenue: $1,000,000
• Total Expenses: Labor ($600,000) + Capital ($150,000) + Materials ($200,000) = $950,000
• Accounting Profit: Sales Revenue - Total Expenses = $1,000,000 - $950,000 = $50,000

Therefore, the firm's accounting profit for last year was $50,000.