Which of the Following Statements Concerning Economic Value Added (EVA)is

question 39

Multiple Choice

Which of the following statements concerning Economic Value Added (EVA) is most correct?

• A) The higher the cost of capital, the higher the EVA, other things being held constant
• B) EVA can be negative even if operating profits are positive
• C) A company with positive net income will have positive EVA
• D) HIgher operating return on assets will result in lower EVA for a company with a debt ratio over 50%

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Definitions:

Normal Good

A good for which demand increases when consumer income rises, and falls when consumer income decreases.

Complementary Goods

Products or services that are typically consumed together because the use of one enhances the use of the other.

Raclette Cheese

Raclette Cheese is a semi-hard cheese from Switzerland, known for its melting qualities and typically used in the dish also called Raclette, where the cheese is heated and scraped onto dishes.

New Potatoes

Young potatoes that have been harvested early in the season, known for their thin skins and tender texture.