Question

Write the word/phrase/term which can substitute the following statement:

`"Capital employed" xx (N.R.R.)/100`

Answer 1

Normal profit

Explanation:

Normal profit is the minimum profit required for a business to stay operational, covering all costs, including opportunity costs. It is calculated as:

Normal profit = `("Capital Employed" xx "Normal Rate of Reture")/100`

It ensures the business earns a fair return on investment, without making extra or abnormal profit.