True or false? a. A firm that earns the opportunity cost of capital is earning economic rents.
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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 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.
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...
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Principles of Corporate Finance
ISBN: 978-0077404895
10th Edition
Authors: Richard A. Brealey, Stewart C. Myers, Franklin Allen
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