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Economic Profit |
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Economic Profit (or Loss) What Does Economic Profit (or Loss) Mean? The difference between the revenue received from the sale of an output and the opportunity cost of the inputs used. Sometimes referred to as economic value added (EVA). Investopedia explains Economic Profit (or Loss) This should not be confused with accounting profit, which is what most people mean when they refer to profit. In calculating economic profit, opportunity costs are deducted from revenues earned. Opportunity costs are the returns not realized by using the chosen inputs. As a result, there can be a significant accounting profit with little to no economic profit. For example, say you invest $100,000 to start a business and in that year earn $120,000 in profits. Your accounting profit would be $20,000. However, say that in the same year, instead of starting the business, you could have worked for someone else and earned $45,000. Therefore, you have an economic loss of $25,000 (120,000 - 100,000 - 45,000). Related Terms: How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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Whether the payment by RailCorp amounted to pure economic loss which as such was not recoverable as a claim in tort against Alpcross. A sampling of specific topics includes: strict liability versus negligence, causation and foreseeability, tort damages, pure economic loss, non-pecuniary losses, punitive damages, environmental liability, products liability, medical malpractice, the empirics of tort, no-fault compensation systems, tort law and liability insurance, and more. They have put money and assets into the savings over the years and if they do not have the financial savings to replace that, it is considered a looming economic loss that can burden your loved ones for years to come. |
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