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Economic Profit is calculated by taking the spread between ________ and _________ , and multiplying the...

Economic Profit is calculated by taking the spread between ________ and _________ , and multiplying the result by______ .

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Answer #1

Economic profit is calculated by taking the spread between RETURN ON INVESTED CAPITAL (ROIC) and COST OF CAPITAL (WACC), and multiplying the result by INVESTED CAPITAL.

Economic profit = Invested capital x (ROIC - WACC)

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