Which of the Following Shows the Calculation for Economic Value

question 14

Multiple Choice

Which of the following shows the calculation for economic value added (EVA) ?]

• A)EVA = NOPAT + After-Tax Dollar Cost of Financial Capital Used
• B)EVA = ROE - Percentage Cost of Financial Capital
• C)EVA = NOPAT - After-Tax Dollar Cost of Financial Capital Used
• D)EVA = ROE + Percentage Cost of Financial Capital

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Definitions:

Marginal Benefits

The additional satisfaction or value that one receives from consuming or producing one more unit of a good or service.

Production Possibilities

A curve or frontier that shows various combinations of the amounts of two goods or services that can be produced within the limits of available resources and technology.

Specialization

The process or strategy of focusing on a narrow area of expertise or production to gain efficiency or quality in the output.

Production Possibilities Curve

A graphical representation of the maximum goods and services that a society can produce, given its productive resources and technology.