Problem

True or false?a. A firm that earns the opportunity cost of capital is earning economic ren...

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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Solutions For Problems in Chapter 11