Question

A firm that earns its cost of capital is said to be earning

A) above normal economic performance.
B) normal economic performance.
C) below normal economic performance.
D) normal accounting performance.

Answer 1

A firm that earns its cost of capital is said to be earning normal economic performance.

Step-by-step explanation:

A firm that earns its cost of capital is said to be earning normal economic performance. When a firm earns its cost of capital, it means that the return it earns on its investments is equal to or greater than the cost of obtaining that capital. This indicates that the firm is generating enough profits to cover its expenses and provide a reasonable return to its investors.