Economic Value Added Is Equal to ________

question 87

Multiple Choice

Economic value added is equal to ________.

• A) After-tax operating income - [Weighted-average cost of capital + (Total assets - Current liabilities)]
• B) Pre-tax operating income - [Weighted-average cost of capital + (Total assets - Current liabilities)]
• C) After-tax operating income - [Weighted-average cost of capital × (Total assets - Current liabilities)]
• D) Pre-tax operating income - [Weighted-average cost of capital × (Total assets - Current liabilities)]

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Definitions:

Statement Of Owner's Equity

A financial document detailing changes in the equity of a company due to earnings, withdrawals, and other factors over a period.

Balance Sheet

A report detailing a corporation's assets, liabilities, and equity of shareholders at a certain moment.

Statement Of Owner's Equity

A financial statement that shows the changes in the equity of a company over a specific period, including contributions, withdrawals, and the company’s net income or loss.

Net Income

The amount of profit left after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from total revenues.