The Economic Value Added (EVA) Method of Assessing Performance Involves

question 10

Multiple Choice

The economic value added (EVA) method of assessing performance involves:

• A) solely after tax profit.
• B) only the cost of capital.
• C) solely total capital employed.
• D) all of the above.

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Definitions:

ATC

Average Total Cost; the total cost per unit of output incurred when producing goods or services.

AVC

Average Variable Cost, the cost that varies with the level of output, divided by the quantity of output produced.

Total Fixed Cost

The sum of all costs that do not change with the level of output produced; these costs are incurred even if production is zero.

Marginal Cost

The increase in cost resulting from the production of one additional unit of a good.