Which of the Following Is Incorrect Description of the Term

question 19

Multiple Choice

Which of the following is incorrect description of the term "economic value added"?

• A) Abnormal earnings
• B) Residual income
• C) Value created by a firm's in period t
• D) EPS_t - B_{t - 1} * k
• E) Excess of required earnings over actual earnings

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Definitions:

Coase Theorem

A concept in economics that if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property.

External Benefit

A benefit derived from a product or service that affects people who are not directly involved in the transaction or production of it.

Pollution Reduction

Efforts and measures taken to decrease the amount of pollutants released into the environment.

Trade Permits

Licenses or permissions required by governments for businesses to engage in certain trade activities, often used to control the volume or nature of traded goods and services.