Economic Value Added

question 40

Multiple Choice

Economic value added:

• A)is a dollar amount rather than a percentage.
• B)uses a firm's weighted-average cost of capital.
• C)uses total assets in its computation and ignores current liabilities.
• D)cannot be negative.
• E)possesses characteristics "A" and "B" abovE.

---

Definitions:

Credit Memo

A paper provided by the seller to the buyer, which decreases the total the buyer needs to pay to the seller based on the conditions of a prior bill.

Discount Period

The discount period is the timeframe during which a payment can be made with a discount for early settlement in terms of credit sales.

Merchandise Sold

The total cost of all products sold by a company during a specific period.

Cash Discount

An incentive offered by sellers to buyers for paying an invoice ahead of the scheduled due date.