When Using Economic Value Added (EVA)to Calculate Residual Income,what Is

question 86

Multiple Choice

When using economic value added (EVA) to calculate residual income,what is the formula for the cost of capital employed?

• A)the standard percentage cost of capital × the average capital employed
• B)the actual percentage cost of capital × the average capital employed
• C)the standard percentage cost of capital × the total capital employed
• D)the actual percentage cost of capital × the total capital employed

Evaluate the effects of gender and location on wages and employment opportunities.

Understand the principle of income redistribution and the philosophical debates surrounding it.

Grasp the concepts of utilitarian justice and distributional justice in relation to income distribution.

Understand the legal capacity required for binding contracts and the special considerations for contracts involving minors.

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Definitions:

Long-run Equilibrium

A state in which all factors of production and market forces are in balance, with no external pressures prompting change.

P = MR

An equality indicating that a firm's price (P) is equal to its marginal revenue (MR), often associated with perfect competition and profit maximization strategies.

MC = ATC

A condition where the Marginal Cost of producing one more unit is exactly equal to the Average Total Cost, typically representing the point of productive efficiency.

Business Fundamentals

Basic principles and practices essential for the successful operation of a business, such as finance, marketing, operations, and management.