Asked by
Merna Hirmiz
on Dec 11, 2024Verified
The rate of return that owners of capital must receive in order to induce them to continue supplying the capital is often referred to as
A) accounting profit.
B) the normal or market rate of return.
C) economic profit.
D) the accounting rate of return.
Normal Rate
The standard or average rate at which something occurs, such as interest rates, inflation, or unemployment rates.
Accounting Profit
The net income of a business as calculated by subtracting total expenses from total revenues, according to standard accounting principles.
Economic Profit
The difference between the total revenue generated by a business and the total opportunity costs of all resources used.
- Understand the importance of considering the opportunity cost of capital when making investment decisions to safeguard a corporation's capital assets.
Verified Answer
JS
Learning Objectives
- Understand the importance of considering the opportunity cost of capital when making investment decisions to safeguard a corporation's capital assets.