True or false?

a. A firm that earns the opportunity cost of capital is earning economic rents.

b. A firm that invests in positive-NPV ventures expects to earn economic rents.

c. Financial managers should try to identify areas where their firms can earn economic rents, because it is there that positive-NPV projects are likely to be found.

d. Economic rent is the equivalent annual cost of operating capital equipment.

AppendixLO1