Economic Value Added (EVA) Can Be Computed as Net Income

question 22

True/False

Economic value added (EVA) can be computed as net income minus interest expense minus capital charge.

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Definitions:

Average Product

The output per unit of input, calculated by dividing total output by the total quantity of inputs.

Labor

The effort by humans to produce goods or services in exchange for wages or other compensation.

Marginal Product

The additional output produced by using one more unit of a production input, holding all other inputs constant.

Employment

The condition of having a paid job or occupation, involving a contract between an employer and an employee that provides compensation for work performed.