Which of the Following Is the Required Rate of Return

question 147

Multiple Choice

Which of the following is the required rate of return used in the economic value added (EVA) calculation?

• A) The ROI of the division or company being evaluated
• B) After-tax weighted-average cost of capital
• C) The residual income/total assets
• D) The after-tax operating income/(Total assets - current liabilities)

---

Definitions:

Analytic Phase

A stage in problem-solving or decision-making processes involving the careful examination and breakdown of information to understand a situation or issue.

Decision-making Process

A systematic series of steps undertaken to select the best course of action among several alternatives.

Authoritative

Commanding and self-assured; likely to be respected and obeyed, often used to describe a style of leadership or writing.

Constructive

An approach or feedback that is intended to bring about improvement or positive change.