Economic Value Added Attempts to Make

question 6

Multiple Choice

Economic Value Added attempts to make:

• A) adds value to the firm's shareholders.
• B) the performance evaluation fair and credible.
• C) the concept of activity based costing more credible.
• D) the concept of residual income the basis for incentive compensation.

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Definitions:

Commercial Activity

Business operations or actions undertaken for the purpose of generating profit.

Expropriation

The act of a government taking privately owned property to be used for public purposes, usually with compensation to the owner.

Public Purpose

Concise definition: The rationale behind legislative actions or government spending which must benefit the public at large, rather than specific individuals or groups.

Fair Compensation

Equitable financial remuneration offered for work performed or damages incurred, intended to justly reflect the value of the labor provided or the loss suffered.