What Is a Common Adjustment Made to Calculate EVA from a Company's

question 33

Multiple Choice

What is a common adjustment made to calculate EVA from a company's audited financial statements?

• A) The addition of goodwill to total assets.
• B) The addition of restructuring costs to operating expenses.
• C) The subtraction of marketable securities' income from operating expenses.
• D) The inclusion of advertising costs in total assets and its depreciation.
• E) The addition of an allowance for doubtful accounts to invested capital.

---

Definitions:

Sales Territories

geographical or demographic areas assigned to sales representatives or teams to manage and cultivate customer relationships and sales activities.

Contribution Margin

The amount of revenue remaining after deducting variable costs, used to cover fixed costs and contribute to profit.

Variable Expenses

Expenditures that fluctuate in alignment with the quantity of production or sales figures, like labor costs and materials used.

Traceable Fixed Expenses

Fixed expenses that can be directly linked to a specific segment of a business and would disappear if the segment did not exist.