Series 79: Economic Profit

Taken from our Series 79 Top-off Online Guide

Economic Profit

A company’s cost of capital is also critical to the concept of economic profit. From an accounting perspective, profit is simply income minus expenses. Economic profit, however, takes into account the opportunity cost of capital—the opportunities that are foregone by pursuing a particular course over another course—in calculating profit. A company’s economic profit is its net profit minus its opportunity cost

Since you're reading about Series 79: Economic Profit, you might also be interested in:

Solomon Exam Prep Study Materials for the Series 79
Please Enable Javascript
to view this content!