Economic Value Added EVA) Is Calculated As

question 18

Multiple Choice

Economic Value Added EVA) is calculated as:

• A) NOPAT plus after-tax dollar cost of financial capital used
• B) ROE minus percentage cost of financial capital
• C) NOPAT minus after-tax dollar cost of financial capital used
• D) ROE plus the percentage cost of financial capital

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Definitions:

Maintenance Cost

Expenses incurred in keeping property, equipment, or machinery in efficient operating condition, including both preventive and corrective measures.

Relevant Range

The span of activity levels within which the assumptions made about cost behavior in cost-volume-profit analysis remain valid.

Average Costs

The total costs (fixed and variable) divided by the total output production, giving a per unit cost of production.

Fixed Manufacturing Cost

The portion of total manufacturing costs that does not change with the level of production, such as rent, insurance, and salaries of permanent staff.