The concept of _______ is used to investigate the profit-making potential of a business, excluding all extraneous factors.

operating loss

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operating profit

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operating expense

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None of the above

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Solution

The correct option is B operating profit
Operating profit is the profit earned through the normal operations and activities of the business. Operating profit is the excess of operating revenue over operating expenses. Operating profit is the income earned from the core operations of a business, excluding any financing or tax-related issues. The concept of operating profit is used to investigate the profit-making potential of a business, excluding all extraneous factors.

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