If Economic Value Added (EVA®)is Negative

question 25

Multiple Choice

If economic value added (EVA®) is negative:

• A)stockholders' wealth has decreased.
• B)stockholders' wealth has increased.
• C)stockholders' wealth has stayed the same.
• D)stockholders' earnings per share have increased.

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Definitions:

Variable Overhead Rate Variance

The discrepancy between the actual incurred variable overhead and the anticipated variable overhead as per standard costing.

Lubricants

Substances that are applied to surfaces to reduce friction and wear between moving parts.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on the predetermined overhead rate.

Power

In a business context, it often refers to the influence or capacity of a company or individual to effect decisions and control resources.