The EVA Calculation and the ROI Calculation Both Use Operating

question 154

True/False

The EVA calculation and the ROI calculation both use operating income before income tax because the income tax expense is NOT relevant to either the EVA or the ROI measures.

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Definitions:

Partnership Dissolves

The process of ending a partnership agreement, which involves the redistribution or liquidation of assets among the partners and settling the partnership's obligations.

Old Partners' Capital Accounts

Accounts used to record the amount of equity owned by each partner in a partnership, prior to any changes or reallocation of partnership interests.

Credited

A term reflecting an entry on the right side of a double-entry bookkeeping system that increases liabilities, revenue, or equity accounts, or decreases an asset or expense account.

Withdraws

The act of removing funds from an account or the business use of assets by owners, reducing the capital or equity amounts.