Question

To calculate profit, which three pieces of information must be indentified?

Answer 1

To calculate profit, you need to identify three pieces of information: total revenues, explicit costs, and implicit costs.

Step-by-step explanation:

To calculate profit, you need to identify three pieces of information: total revenues, explicit costs, and implicit costs.

The formula to calculate profit is: Profit = Total Revenues - Explicit Costs - Implicit Costs.

For example, let's consider a company that has total revenues of $200,000, explicit costs of $85,000, and implicit costs of $125,000. Using the formula, the profit would be calculated as: $200,000 - $85,000 - $125,000 = -$10,000 per year.