Which of the Following Statements Is CORRECT

question 17

Multiple Choice

Which of the following statements is CORRECT?

• A) The primary difference between EVA and accounting net income is that when net income is calculated, a deduction is made to account for the cost of common equity, whereas EVA represents net income
• Before deducting the cost of the equity capital the firm uses.
• B) MVA gives us an idea about how much value a firm's management has
• Added during the last year.
• C) MVA stands for market value added, and it is defined as follows:
• MVA = (Shares outstanding)(Stock price) + Book value of common equity.
• D) EVA stands for economic value added, and it is defined as follows:
• EVA = EBIT(1-T) - (Investor-supplied op. capital) x (A-T cost of capital).
• E) EVA gives us an idea about how much value a firm's management has added over the firm's life.

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Definitions:

Electron Transport Phosphorylation

The process through which ATP is produced during the final stages of cellular respiration in the mitochondria, driven by the electron transport chain.

Aerobic Organisms

Living beings that require oxygen to survive and to carry out cellular respiration.

Final Electron Acceptor

A molecule that accepts electrons at the end of an electron transport chain, facilitating the conservation of energy in the form of ATP.

Citric Acid Cycle

A series of chemical reactions used by all aerobic organisms to generate energy through the oxidation of acetate derived from carbohydrates, fats, and proteins.