If a Division of a Multidivisional Firm Has Adjusted Accounting

question 55

Multiple Choice

If a division of a multidivisional firm has adjusted accounting earnings of $10 million, a weighted average cost of capital of 10% and a total capital employed by the division of $50 million, the division has an EVA of

• A) $25 million.
• B) $5 million.
• C) $15 million.
• D) $20 million.

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Definitions:

Organizational Behaviour

The study of how people interact within groups in a work setting, often to understand and improve workplace dynamics.

Scientific Management

A theory of management focusing on improving economic efficiency, especially labor productivity, by systematically refining operational procedures.

Specialization

The process of focusing on a specific area of study or work, developing expertise in a particular field.

Standardization

The process of implementing and developing technical standards to ensure consistency, safety, and interoperability of products or processes.