If a Firm Uses $1 Million Worth of Raw Materials;

Multiple Choice

If a firm uses $1 million worth of raw materials; pays wages of $500,000; rent of $100,000; and interest of $100,000, and sells its output for $2 million, its net earnings before taxes are:

A) $300,000.
B) $400,000.
C) $700,000.
D) $1,000,000.
E) $2,000,000.