1. Explain the importance of explicit and implicit cost when calculating profit/loss.

1. Classify the following costs as explicit or implicit. Explain your answer

• The Global Transport Corporation spent 1 million dollar on advertising the business.
• A removalist firm spent 10000 dollars on fuel to run its business.
• The owner of Tim's bakery spends 7 hours a week cleaning his bakery.
• Rio Tinto spent 200 million on executive salaries.