The Following Are Advantages of Using EVA as a Measure

question 1

Multiple Choice

The following are advantages of using EVA as a measure of performance except:

• A) EVA is a substitute for explicit monitoring by top management
• B) EVA makes the cost of capital visible to the operating management hence reduce capital employed
• C) EVA does not measure present value
• D) EVA highlights the parts of business that are not performing

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Definitions:

Adjusted Trial Balance

A statement of all debits and credits in a double-entry accounting system, adjusted for any journal entries, used to verify the balance of accounts before producing financial statements.

Financial Statement Column(s)

Columns in financial statements where various financial data are reported, such as assets, liabilities, revenues, and expenses.

Net Income

The net income of a company once all costs and taxes are subtracted from the total income.

Beginning Inventory

The estimated financial value of items ready to be sold at the onset of a ledger year.