The economic profit generated by a company is its ________.
A)(capital x cost of capital)/ net profit
B)net profit / (capital x cost of capital)
C)net profit + (capital x cost of capital)
D)net profit - (capital x cost of capital)
E)(capital x cost of capital)- net profit

Question

Quizplus · Accepted Answer

Economic profit is calculated by subtracting the opportunity cost of the capital used in the business (capital x cost of capital) from the net profit. Therefore, the correct answer is D, net profit - (capital x cost of capital).

The Economic Profit Generated by a Company Is Its ________