Consider a Firm That Employs Some Resources That Are Owned

question 19

Multiple Choice

Consider a firm that employs some resources that are owned by the firm.When accounting profit is zero,economic profit

• A)must also equal zero.
• B)is sure to be positive.
• C)must be negative and shareholder wealth is reduced.
• D)cannot be computed accurately,but the firm is breaking even nonetheless.

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Definitions:

Historical Returns

Historical returns refer to the past performance or yield of an investment or portfolio over a specified period of time.

Years

A measurement of time that typically consists of 365 days, or 366 in a leap year, used as a basic unit for gauging durations and intervals.

Total Percentage Return

A measure of the overall return on an investment, including both capital gains and dividends or interest, expressed as a percentage of the initial investment value.

Interest Payment

The payment made by a borrower to a lender as a form of compensation for the use of borrowed money.