Which of the Following Does Not Accurately Describe Economic Value

question 15

Multiple Choice

Which of the following does not accurately describe economic value added.

• A) It is after-tax operating profit minus the total annual cost of capital.
• B) It includes the cost of debt and the cost of equity.
• C) It is a measure of the value added or depleted from shareholder value in one period.
• D) It requires that different costs of capital be used in different country settings.

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Definitions:

Covenants

Legally enforceable agreements or promises within a deed or contract, often related to the use of land or property.

Standard of Living

A level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.