Economic Value Added (EVA) Is a Concept That Is Closely

question 140

Multiple Choice

Economic value added (EVA) is a concept that is closely related to residual income. EVA is computed by:

• A) subtracting the adjusted total cost of capital from the adjusted after-tax income.
• B) subtracting adjusted after-tax income from total divisional investment.
• C) dividing adjusted after-tax income by adjusted divisional investment.
• D) dividing adjusted after-tax income by adjusted total cost of capital.