What is the difference between accounting profit and economic profit? a. Accounting profit emphasizes cost of debt
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Question:
What is the difference between accounting profit and economic profit?
a. Accounting profit emphasizes cost of debt and equity while economic profit focuses on cost of debt.
b.Accounting profit accounts for interest expense while economic profit accounts for interest expense and opportunity cost.
c. Accounting profit can be calculated by NOPAT - [WACC (Costly Capital)], while economic profit is simply NI.
d. Accounting profit is synonymous with NI, while economic profit represents EPS.
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