How would you define profit Discuss fully What are the conse

How would you define profit? Discuss fully. What are the consequences of negative profit (loss)? How can profit be made appealing to the individual?

Solution

Profit can be seen as the extra money which is received by a person when he or she invests or spends an amount on some kind of investments. Profit can be seen as the difference between the total revenue earned and the total expenses incurred.

Profit= Total Revenue- Total Expenses

Each of us wants to have the positive profit as it results in a greater return on investment.

The negative profit or the losses are quite demoralizing for any investor. As if a person is investing any amount in any investment opportunity, and if some losses or negative profits are incurred, this will cause the person to lose his or her money. This will be a demoralizing factor for the future investments and the person will think twice while investing the money in any investment opportunity.

Profit is the most motivating factor while taking ant investment decisions. If the chances of earning the profit are quite high, the person will be attracted towards these opportunities as it will facilitate the person to earn a greater return or the money by investing funds. Greater the expectation of earning the profit, higher will be thee motivation to invest.