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How would you define the difference between accounting and economic profit? What are some examples that demonstrate the difference between accounting and economic profit?

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How would you define the difference between accounting and economic profit?

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Accounting Profit can be defined as Sales Revenue minus all costs except the cost of equity capital, while Economic Profit is Sales Revenue munus all costs including the opportunity cost of equity capital. In other words, economic profit also ...

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Sandeep Bardia, MBA
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  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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