PROFITABILITY Definition

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PROFITABILITY is companys ability to generate revenues in excess of the costs incurred in producing those revenues.

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INCREMENTAL COST is the increase or decrease in costs as a result of one more or one less unit of output.

REVENUE CONTRACT is a binding agreement between a governmental body and another party that defines the terms under which revenue will be received. A contract can be distinguished from a customer purchase order by the fact that a contract will contain the signatures of both parties, while a purchase order will contain only the signature of the customer.

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