Which of the Following Statements Is CORRECT

question 3

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) * (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:

Taste Receptor Cells

Specialized cells found in taste buds that are responsible for detecting different tastes like sweet, sour, salty, and bitter.

Taste Buds

Sensory organs located on the tongue that are responsible for perceiving different tastes.

Gestalt Principles

Principles that describe the brain’s organization of sensory information into meaningful units and patterns.

Hearing

The sensory process by which sound waves are transformed into electrical signals that are interpreted by the brain as sound.