Economic Value Added Is Calculated From

question 26

Multiple Choice

Economic value added is calculated from:

• A)Average total assets, current liabilities, net income, and the cost of capital.
• B)EVA net income and EVA invested capital.
• C)Net income, cost of capital, and net assets.
• D)Net income and the cost of capital.
• E)EVA net income, the cost of capital, and EVA invested capital.

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Definitions:

Selling Price

The amount of money for which an item is sold to a buyer.

Hedge Transaction

A financial agreement or trade designed to reduce or eliminate the risk of future price fluctuations.

Forward Rate

A future exchange rate negotiated today, locking in the price at which a currency transaction will occur at a specified future date.

Forward Contract

A contractual agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.