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
D
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The main purpose of a market-value balance sheet is to:
A) value assets and liabilities without GAAP restrictions. B) show an inflated value of the firm. C) avoid the recording of certain liabilities. D) improve the credit rating of the firm.
Which of the following statements about the balance sheet is most correct?
a. The lower (right-hand) section reports cash and other assets. b. The balance sheet reports on a business's operations. c. The asset side of the balance sheet is listed in decreasing order of maturity (i.e., longer maturity assets are listed first). d. The upper (left-hand) section reports liabilities and equity. e. None of the above statements are correct.