The Divergence Between Accounting Profit and Economic Profit Is Likely

question 42

Multiple Choice

The divergence between accounting profit and economic profit is likely to:

• A)Greater for highly leveraged firms than for equity-financed firms
• B)Greater for labor-intensive firms than for capital-intensive firms
• C)Greater for capital-intensive firms than for labor-intensive firms
• D)Greater for technology-based firms than firms in mature industries

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Definitions:

Unilateral Contract

A contract in which one party makes a promise in exchange for the other party's performance, rather than a promise in return.

Counter-Offer

A proposal made as a response to an offer, which negates the original offer and suggests new terms for an agreement.

Revocation

The official cancellation or withdrawal of an offer, license, or agreement.

Unilateral Contract

A binding agreement in which one party promises to do something in return for an act of the other party, rather than a promise.