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Economics:

10th Edition
BOYES + 1 other
Publisher: Cengage Learning
ISBN: 9781285859460

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Section
BuyFindarrow_forward

Economics:

10th Edition
BOYES + 1 other
Publisher: Cengage Learning
ISBN: 9781285859460
Chapter 23, Problem 15E
Textbook Problem
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GM’s net income in 2010 was $4.7 billion. What would its accounting profit be if its cost of equity capital was $5 billion? What would its economic profit be if its cost of equity capital was $5 billion?

To determine

To calculate:

The accounting profit and economic profit of GM's.

Explanation of Solution

The calculation of GM's accounting profit and economic profit:

Accounting profit is the net income which is $4.7 billion.

  Economicprofit=AccountingprofitCostofequity

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