It is important for a business firm to have a residual claimant because

A) income not claimed for accounting purposes is lost.
B) otherwise surplus profits would set off a process of "profit inflation.'
C) residuals account for as much as thirty percent of the wealth generated annually in the United States.
D) some person must finally be liable for all corporate acts.
E) the claimant produces an effective incentive to consider all costs and benefits relevant to a firm.


E

Economics

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