If the Return on Capital Is Less Than the Cost

question 37

Multiple Choice

If the return on capital is less than the cost of capital

• A)economic profits are zero.
• B)accounting profits are zero.
• C)then accounting profits minus economic profit are zero.
• D)economic profits are negative.

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Definitions:

Parameter

A numerical characteristic of a population, such as its mean or standard deviation, that is usually unknown and estimated from sample data.

Exponential Density Function

A probability density function used to model the time between events in a process where events occur continuously and independently at a constant average rate.

Density Function

A mathematical function that describes the probability distribution of a continuous random variable, indicating the likelihood of a variable taking on a particular value.

Exponential Distribution

A probability distribution used to model the time between events in a process where events occur continuously and independently at a constant rate.