Author Question: A firm has 300 million in revenues and explicit costs of 100 million. If its owners have invested ... (Read 110 times)

joe · **on:** Jun 30, 2018

A firm has 300 million in revenues and explicit costs of 100 million. If its owners have invested 150 million in the company at an opportunity cost of 10 percent a year, the firm's accounting profit is:
a. 50 million.
b. 150 million.
c. 185 million.
d. 200 million.

Question 2

The U.S. government bonds are likely to be less risky because:
a. the government always runs a balanced budget.
b. the government bonds are backed by gold.
c. the government can raise taxes to redeem the bonds at maturity.
d. the government has limited liability to repay.
e. the government always has an excess reserve of foreign exchange.