After-Tax Operating Profit Minus the After-Tax Weighted-Average Cost of Capital

question 45

Multiple Choice

After-tax operating profit minus the after-tax weighted-average cost of capital multiplied by total assets minus current liabilities equals:

• A)economic value added.
• B)weighted-average cost of capital.
• C)residual income.
• D)return on investment.

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Definitions:

Insurance Premiums

The amount of money an individual or business pays for an insurance policy.

Break-even Point

The financial analysis point at which total costs and total revenues are equal, yielding no net loss or gain.

Break-even Point

The break-even point is the point at which total costs equal total revenues, resulting in neither profit nor loss for the business.

Estimated Fixed Costs

Forecasted expenses that do not vary with the level of production or sales over a specific period of time.