Which of the Following Best Defines the Term Economic Value

question 235

Multiple Choice

Which of the following best defines the term economic value added (EVA) ?

• A) The weighted average of the costs of debt and equity.
• B) Net income after interest and taxes divided by average common shareholders' equity.
• C) Use of a WACC that is unique to a particular project.
• D) Performance measure based on WACC.
• E) Base case net present value of a project's operating cash flows plus present value of any financing benefits.

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Definitions:

Bank Deposit

Money placed into a banking institution for safekeeping, which can include checking and savings accounts.

Bank Reconciliation

The process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement.