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Dirce T Pliego
on Dec 11, 2024

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What amount must be earned to induce investors to continue to supply the funds necessary to maintain a firm's capital assets?

A) stockholder equity
B) the opportunity cost of capital
C) economic profit
D) accounting profit

Opportunity Cost of Capital

The potential return that is foregone by investing capital in one project rather than an alternative investment.

Stockholder Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership interest of shareholders.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the extent to which a firm has exceeded the break-even point.

  • Recognize the opportunity cost of capital as a key concept in investment decisions for maintaining a firm's capital assets.
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Makayla BonnerDec 14, 2024
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