Author Question: A firm's normal profit is best characterized by the A) average of a firm's profits over the past ... (Read 64 times)

nelaaney · **on:** Jul 1, 2018

A firm's normal profit is best characterized by the

A) average of a firm's profits over the past five years.
B) amount of profit necessary to keep the price of a firm's stock from changing.
C) amount of profit a firm could earn in its next best alternative activity.
D) the average amount of profit earned in the firm's industry.

Question 2

The Net Present Value approach to investment results in an investment being undertaken only if

A) its net present value is positive.
B) its net present value is zero.
C) it has positive cash flow.
D) its internal rate of return equals the rate of interest.