A Firm Has an Average Investment of $1,000 During the Year.During

question 17

Multiple Choice

A firm has an average investment of $1,000 during the year.During the same time,the firm generates after-tax earnings of $150.
Calculate the economic value added (EVA) for the firm.(The cost of capital is 10%.)

• A)$100
• B)$50
• C)$120
• D)$150

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Definitions:

Consumption Increase

A rise in the amount of goods and services consumed by households or the economy over a period.

Price Increase

A rise in the cost of goods or services, affecting demand, supply, and inflation.

Optimal Consumption

The mix of goods and services that maximizes a consumer's utility given their budget constraints.

Initial Endowment

The initial quantity of goods, services, or resources an individual, institution, or country possesses at the start of an economic analysis.