Final answer:
The term that defines the amount of monetary profit earned over time is net income, which is total revenue minus all associated costs. It is different from other financial terms, such as revenue, gross profit, and ROI.
Step-by-step explanation:
The term that best defines the amount of monetary profit earned over time is net income. Net income is calculated by subtracting the total costs, including operating expenses, interest, taxes, and other expenses, from the total revenue that a company earns. Total revenue is determined by multiplying the price of a product by the quantity sold. However, it's important to understand that net income is different from other related terms, such as revenue, gross profit, and return on investment (ROI), which all have specific meanings in the context of business finances.
Revenue represents the total income before any costs are deducted, while gross profit is the income left over after deducting only the cost of goods sold from the revenue. Return on investment (ROI) measures the efficiency of an investment, comparing the net income to the initial investment cost.
To calculate accounting profit, which is also known as the bottom line, you subtract the explicit costs, including depreciation, from the total revenues. In contrast, economic profit includes both explicit and implicit costs when measuring profitability.