cost and excess profit (residual income), two all-pervasive notions of economics: They are defined by undoing a given …

of period rates. Economic profitability of an asset or a portfolio of assets is captured by the spread between AIR and …

class (weighted by book values) captures the project's economic profitability. Such a rate of return spans a space of …

return (ROA) as a measure of economic profitability. We turn this reasoning process on its head by demonstrating that a … suitable (weighted average) aggregation of ROAs better captures what is generally meant by economic profitability than does the … profitability in the sense that it will correspond exactly with what would be obtained from a net present value calculation. We also …

(ROI), obtained as the ratio of total operating profit (NOPAT) to total invested capital or, equivalently, as the ratio of …

This paper deals with the problem of modelling in a formal way the concept of excess profit, also known as residual … income. A common idea is that excess profit is an unequivocal concept, being the difference between profit and costs, where … all types of costs are taken into account, included the opportunity cost, i.e. the profit the entrepreneur would obtain if …