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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
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.
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Option A is false A firm should earn at least the opportunity cost of capital I...Get Instant Access to Expert-Tailored Solutions
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