If value of investment is $50,000 and cost of investment is $40,000, what is net profit?

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Multiple Choice

If value of investment is $50,000 and cost of investment is $40,000, what is net profit?

Explanation:
Net profit equals the amount earned above the cost of the investment—the difference between what the investment is worth and what was spent. Here, value is 50,000 and cost is 40,000, so the difference is 10,000. That means the net profit is 10,000. The other numbers don’t fit because they would require different relationships between value and cost (for example, zero would mean value equals cost, and 50,000 would ignore the cost).

Net profit equals the amount earned above the cost of the investment—the difference between what the investment is worth and what was spent. Here, value is 50,000 and cost is 40,000, so the difference is 10,000. That means the net profit is 10,000. The other numbers don’t fit because they would require different relationships between value and cost (for example, zero would mean value equals cost, and 50,000 would ignore the cost).

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