Multiple Choice
When there is an excess of expected net income over the cost of capital
A) abnormal net income is positive.
B) accounting profits are negative.
C) abnormal net income is negative.
D) economic profits minus abnormal net income is negative.
Correct Answer:
Verified
Correct Answer:
Verified
Q10: The financial statement that shows how revenue
Q11: Entry continues as long as<br>A)economic profits are
Q12: Economic profit is<br>A)revenue - variable costs +
Q13: If the return on capital is equal
Q14: An increase in revenue causes economic profit
Q16: Stock prices change with surprises.
Q17: The abnormal net income model defines the
Q18: Entry into a competitive market will continue
Q19: To calculate the cost of capital<br>A)it needs
Q20: Economic profit equals NOPAY plus capital charges.