the term “value added” for a firm is best defined as which of the following?
The term “value added” for a firm is best defined as which of the following?
Answer:
The term “value added” for a firm is typically defined as the increase in value that a company creates during the production process. It represents the additional value a company generates over and above the original cost of production inputs. This concept is often used to measure the economic contribution of a business and can be calculated by subtracting the cost of raw materials and other inputs from the total sales revenue of the company. Essentially, it quantifies the amount by which the value of goods or services is increased at each stage of production. This indicator is important for assessing a firm’s efficiency, productivity, and overall performance in creating value within the economy.