NORMAL PROFIT Definition

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NORMAL PROFIT is the opportunity cost of using entrepreneurial abilities in the production of a good, or the profit that could have been received by entrepreneurship in another business venture. Like the opportunity costs of other resources, normal profit is deducted from revenue to determine economic profit. It is, however, never included as an accounting cost when accounting profit is computed.

Learn new Accounting Terms

CAGR see COMPOUND ANNUAL GROWTH RATE.

PPS see PROBABILITY PROPORTIONAL TO SIZE SAMPLING.

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