BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -If the actual reward is greater than the value of risk then the company will earn Profit. The risk-return tradeoff is an investment principle that indicates that the higher the risk, the higher the potential reward. If the reward is greater than risk, then a company is said to be earning profits.

Detailed explanation-2: -The profit generated by the organisation is the reward received for coordinating and controlling the other three factors of production namely land, labour and capital. Profits are the extra income which is the difference between the capital used to produce a product and the selling amount of the product.

Detailed explanation-3: -An economic theory proposed by professor and economist F.B. Hawley states that profit is a reward for risk taken in business. According to Hawley, the higher the risk in business, the greater the potential financial reward is for the business owner.

Detailed explanation-4: -Profit simply means a positive gain generated from business operations or investment after subtracting all expenses or costs. In economic terms profit is defined as a reward received by an entrepreneur by combining all the factors of production to serve the need of individuals in the economy faced with uncertainties.