The Calculation of Economic Value Added Is

question 148

Multiple Choice

The calculation of Economic Value Added is

• A) margin minus total annual cost of capital.
• B) operating income minus average cost of capital.
• C) operating income minus total annual cost of capital.
• D) operating income minus taxes and the total annual cost of capital.

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Definitions:

Overall Set

The complete or total collection of elements, items, or objects under consideration.

Anchoring

The tendency people have to unconsciously base, or “anchor,” the valuation of an item they are currently thinking about on recently considered but logically irrelevant information.

Irrelevant Information

Information that has no bearing on the decisions being made, providing no value to the decision-making process.

Anchoring

A cognitive bias that describes the human tendency to rely too heavily on the first piece of information offered when making decisions.