Which of the Following Adjustments to After-Tax Operating Income Is

question 60

Multiple Choice

Which of the following adjustments to after-tax operating income is used to approximate cash income for EVA?

• A) expensing research and development costs
• B) using LIFO inventory method
• C) deducting after tax interest expense
• D) using taxes paid rather than tax expense

---

Definitions:

Savings

Money that is set aside from disposable income or after personal expenses have been covered, often put into a deposit or an investment for future use.

Wealth Effect

The change in spending and consumption patterns caused by changes in perceived wealth.

Recessions

are described as periods of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in successive quarters.

Saving Exceeded Investment

A situation where the amount of savings in an economy surpasses the level of investment spending.