Finance Formulas / July 13, 2018 / Iliana Williamson
Down payment (or downpayment, also called a deposit in British English), is a payment used in the context of the purchase of expensive items such as a car and a house, whereby the payment is the initial upfront portion of the total amount due and it is usually given in cash at the time of finalizing the transaction. A loan or the amount in cash is then required to make the full payment.
Economic profit is the difference between the revenue a firm earns from sales and the firm’s total opportunity costs. It’s important to distinguish between accounting profit and economic profit. Accounting profit is total revenue minus the explicit costs of producing goods or services. Explicit costs are things like raw materials and employee wages. This is what most people are referring to when they talk about profit.
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