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Two enterprises have equal revenue, but the first has stable costs while the second has rapidly rising costs. Which conclusion is appropriate?

Answer and explanation

Correct answer: Performance cannot be judged by revenue alone

Revenue is the money earned from sales, but it is not the same as profit. Profit depends on revenue after costs are deducted, and rapidly rising costs can reduce profit and threaten sustainability. Since the exact cost amounts and other business factors are not given, it is not possible to declare either enterprise definitely more profitable. Therefore, option B is the sound conclusion.

Related tags

RevenueCostProfitabilitySustainabilityIntroduction To EntrepreneurshipEntrepreneurial Skills IArtificial IntelligenceClass 9 Mcq

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