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:

Extroversion

A personality trait characterized by sociability, talkativeness, assertiveness, and high levels of emotional expressiveness.

Choleric

A temperament characterized by a fast, active response to stimuli, often indicative of a person prone to be more easily angered or bad-tempered.

Melancholic

A temperament characterized by deep, pensive sadness or contemplation, often connected to artistic or creative endeavors.

Phlegmatic

A temperament characterized by a calm, reliable, and even-keeled personality, often associated with a high threshold for emotional excitability.