Which Statement Regarding EVA Is True

question 49

Multiple Choice

Which statement regarding EVA is true?

• A)One way to increase EVA is to achieve the same level of operating income but with more investor-supplied capital.
• B)If a firm reports positive net income, its EVA must also be positive.
• C)One drawback of EVA as a performance measure is that it mistakenly assumes that equity capital is free.
• D)One way to increase EVA is to generate the same level of operating income but with less investor-supplied capital.

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Definitions:

Poverty Rate

The percentage of the population living below the poverty line, which is typically defined as the minimum level of income deemed adequate in a particular country.

Demographic Group

A specific segment of the population categorized by distinguishable characteristics, such as age, gender, income, etc.

Female-headed Families

Households led by women, often highlighted in discussions on poverty, social policy, and income support due to unique socioeconomic challenges.

Social Insurance

programs designed to provide financial protection against certain life risks (e.g., old age, disability, unemployment) funded by contributions from employers, employees, or both.