Economic Value Added (EVA) Is Calculated as Follows

question 58

Multiple Choice

Economic Value Added (EVA) is calculated as follows:

• A) EVA = Income Earned - (cost of debt) * (investment)
• B) EVA = Income Earned - (cost of equity) * (investment)
• C) EVA = Income Earned - (cost of capital) * (investment)
• D) none of the above

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Definitions:

Three-Party Agreement

A contract involving three distinct parties, each undertaking specific obligations or rights.

Co-Signs

refers to the act of signing a loan or agreement alongside another person, assuming joint responsibility for the obligation.

Statute of Frauds

A legal principle that requires certain types of contracts (e.g., real estate transactions, contracts not to be performed within a year) to be in writing and signed by the parties to be enforceable.

Credit

A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at a later date, generally with interest.