The normal rate of return on capital is also known as the

Question

Quizplus · Accepted Answer

The normal rate of return on capital is the opportunity cost of capital, which represents the return that could be earned from an alternate investment of equal risk. A is incorrect because fixed cost of capital is a specific cost related to financing, such as interest payments. B is incorrect because depreciation is not a cost of capital, but a non-cash expense related to accounting for the decline in value of an asset over time. D is incorrect because monopoly rent is a term used to describe the excess profit earned by a company with a dominant market position, and is not directly related to the cost of capital.

The Normal Rate of Return on Capital Is Also Known