Using Economic Value Added (EVA) to Calculate Residual Income, the Cost

question 16

Multiple Choice

Using Economic Value Added (EVA) to calculate residual income, the cost of capital employed is

• A) the standard percentage cost of capital multiplied by the average capital employed.
• B) the actual percentage cost of capital multiplied by the average capital employed.
• C) the standard percentage cost of capital multiplied by the total capital employed.
• D) the actual percentage cost of capital multiplied by the total capital employed.

---

Definitions:

Mnemonic Devices

Tools or methods used to improve the ability to remember information, typically involving patterns, rhymes, or associations.

Mind Map

A visual diagram that represents concepts, words, tasks, or items linked to and arranged around a central concept or subject using a nonlinear graphical layout that allows the user to build an intuitive framework around a topic.

Lecture

A formal presentation or talk given to an audience or class, usually for educational purposes.

Reflect

To think deeply or carefully about something, often for the purpose of gaining insight or understanding.