Which of the Following Is True of Economic Value Added

question 77

Multiple Choice

Which of the following is true of economic value added (EVA) ?

• A) Economic value added is calculated by adding revenue to operating profit.
• B) Economic value added is calculated by multiplying margin ratio and average operating assets.
• C) Economic value added is calculated by dividing operating income by sales.
• D) Economic value added is calculated by deducting the dollar cost of capital employed from after-tax operating income.

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Definitions:

Odometer

A device used for measuring the distance traveled by a vehicle.

Distance Travelled

denotes the length of the path taken by an object or individual from one point to another, usually measured in units such as kilometers or miles.

Tungsten Filaments

Thin strands of tungsten used as the heating element in incandescent light bulbs, producing light when electrically heated.

Incandescent Bulbs

Electric light sources that produce light by heating a filament wire to a high temperature.