Economic Value Added (EVA)is

question 46

Multiple Choice

Economic Value Added (EVA) is:

• A) The difference between the return on assets and the opportunity cost of capital times the capital base
• B) ROA x ROE
• C) A measure of the firm's abnormal return
• D) Largest for high growth firms

---

Definitions:

Adam Smith

An 18th-century Scottish economist and philosopher, widely considered the father of modern economics, best known for his works on the principles of free market capitalism.

Free Markets

Economic systems in which the prices for goods and services are determined by the open market and consumers, without government intervention.

Equilibrium Price

The rate in the marketplace at which the volume of goods being offered is the same as the volume of goods being sought.

Equilibrium Quantity

The quantity of a good or service at which demand meets supply.