profitable company definition
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profitable company definition

In theoretical economics, investment means buying (and therefore producing) capital goods - not being consumed but being used in future production. Examples include building railroads, or factories, cleaning the land, or allowing yourself to go to college. Strictly speaking, investment in formula GDP= C + I + G + NX is also part of gross domestic product. In that respect, the function of investment is divided into non-residential investments (such as factories, machinery, etc.) and residential investment (new homes). The correlation between I = (Y, I) is known to have a close relationship with income and interest rates. Higher incomes would boost higher investment, but higher interest rates would discourage investment because it would be more expensive to borrow. Even if companies choose to use their own funds to invest, interest rates represent the opportunity cost of investing in those funds rather than the interest that will lend out. It is not obvious in some analyses, but it is important to note that economic profits include opportunity costs. The profit of an entrepreneur (normal profit) is usually positive, but economic profit can be either positive or negative (loss). That's why the opportunity cost is included: in a completely competitive market, when marginal cost equals marginal revenue, profit maximization or loss minimization conditions arise. If the market price is lower than the total average cost, which means that the economic profit is negative, the entrepreneur needs to compare the value of the loss and the average variable cost. If the business continues to operate, the negative economic profit must not be lower than the average variable cost, otherwise the entrepreneur would rather shut down the company than continue to take the loss. Macroeconomics' need for government intervention ' In the light of monetary crisis 2007 - 2010, many companies have had to trim their spending. Meanwhile, in the earlier years, they donated immeasureable dollars. Although there remained many big corporations which still gave away billions to charity within the global slowdown, others slimmed down their funds donations. In 2009, many company gained bigger profits, but this would not translate into bigger donations. Tough economic times can't prevent America's largest business from continuing giving in 2009. 30% of the large corporations gave more cash, and 16% gave a comparable because the year before. In general, total of 68 companies gave less during 2009 than 2008. Cash and product giving combined fell the first time for recent seven years. The following is a summary of companies which gave most during 2009. They were measured by comparing total giving in cash and products during 2009 to total profits in the year before.