Accounting profit includes profits as shown on a companys financial statements, and it takes into consideration explicit costs, while economic profit is a broader measure of profit that includes the recognition of both explicit and implicit costs (like the cost of equity capital) (Froeb et al., 2018). A specific value to review to determine a firm's accounting profit is net income, which is referred to as the bottom line by accountants. A net income value can be found on a firms income statement. (Note that income statements for publicly traded firms within the United States can be found for free through an internet search.) A positive net income value would indicate that the firm is indeed generating accounting profit, while a negative net income value would indicate that the firm is not generating accounting profit. Economic profit is harder to measure since it also includes implicit costs, some of which can be difficult to measure since they are not necessarily easy to quantify. _____________________ 1. Select a U.S. publicly traded company. What level of net income did the firm achieve during the last year or period that you found (the value should be from the last 18 months)? Did the firm earn an accounting profit? Explain. 2. Assume the firm was unable to earn an economic profit? What does this mean for the firm you selected? 3. Explain why it is important for any firm to earn both an accounting profit and economic profit, and why any firm that only earns an accounting profit will likely not stay in business very long.