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Answer to Question #72442 in Finance for Jones

Question #72442
A firm owned by an investor who invested $500, 000 earns a profit of $150, 000 a year. The best investment alternative for the investor is a portfolio of stocks and bonds earning a return of 12%. What is the economic profit?
Expert's answer
Economic profit = Revenue - Opportunity cost
Opportunity cost = ($500 000 * 12%)/100% = $60 000
Economic profit = $150 000 - $60 000 = $90 000

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Assignment Expert
16.01.18, 14:46

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Jones
16.01.18, 13:12

thank you, i also did something like this. now i have confirmed.

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