Which of the Following Statements Is CORRECT

question 7

Multiple Choice

Which of the following statements is CORRECT?

• A) One way to increase EVA is to achieve the same level of operating income but with more investor-supplied capital.
• B) If a firm reports positive net income,its EVA must also be positive.
• C) One drawback of EVA as a performance measure is that it mistakenly assumes that equity capital is free.
• D) One way to increase EVA is to generate the same level of operating income but with less investor-supplied capital.
• E) Actions that increase reported net income will always increase net cash flow.

---

Definitions:

Threatening Event

An occurrence that poses a danger or harm, potentially triggering stress or anxiety.

Course of Action

A plan or strategy intended to accomplish a specific goal, often involving a series of steps or procedures to be followed.

Predictability

Predictability refers to the extent to which future events or behaviors can be accurately forecasted based on current or past data.

Ulceration

The formation of ulcers, which are open sores on the skin or mucous membranes that fail to heal properly.