Calculate the Economic Profit Generated by a Business with a Capital

question 6

Multiple Choice

Calculate the economic profit generated by a business with a capital cost of 10% for $2 billion of capital invested.Its net marketing contribution is $450 million and its other expenses,including interests and taxes,amount to $200 million.

• A)$250 million
• B)$200 million
• C)$50 million
• D)$100 million
• E)$150 million

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Definitions:

Notes Payable

Financial obligations or loans that a company promises to repay by a certain date, often evidenced by a promissory note.

Interest Expense

The cost incurred by an entity for borrowed funds, reflected as an expense on the income statement.

Maturity Date

The date on which a financial obligation, such as a note, bond, or loan, becomes due and is to be paid off.

Notes Payable

A written agreement or promissory note requiring the borrower to repay the principal amount along with interest within a specified period, representing a liability on the balance sheet.