Which of the Following Statements Regarding the Calculation of Economic

question 20

Multiple Choice

Which of the following statements regarding the calculation of Economic Value Added (EVA®) is not true?

• A) Adjusted accounting data are used to estimate EVA®.
• B) The operating approach and the financing approach lead to identical estimates of EVA®.
• C) EVA® NOPAT represents after-tax cash operating income, after depreciation.
• D) EVA® NOPAT represents after-tax cash operating income, before depreciation.
• E) The divisional cost of capital (minimum rate of return) is used to impute a charge on capital invested in the division during the period.

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Definitions:

Degrees of Freedom

The number of independent pieces of information available to estimate another piece of information or the parameters of a model.

Treatments

The conditions or interventions applied to participants in an experimental study.

F-Test

An F-test is a type of statistical test that compares the variances of two populations to determine if they are significantly different from each other.

Randomized Block Design

Randomized block design is a statistical experiment design that aims to reduce variation by grouping similar experimental units into blocks before randomly assigning treatments within blocks.