Which of the Following Is the Correct Calculation of Economic

question 54

Multiple Choice

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

• A)Net Operating Profit Before Tax - [Weighted-Average Cost of Capital ´ (Total Assets - Non-Interest-Bearing Debt)].
• B)Net Operating Profit After Tax - [Weighted-Average Cost of Capital ´ (Total Assets - Non-Interest-Bearing Debt)].
• C)Weighted-Average Cost of Capital ´ [Net Operating Profit Before Tax - (Total Assets - Non-Interest-Bearing Debt)].
• D)Weighted-Average Cost of Capital ´ (Net Operating Profit After Tax - [Total Assets - Non-Interest-Bearing Debt)].

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Definitions:

Wealth

The accumulation of valuable economic resources and assets, including property, investments, and cash, that an individual or entity possesses.

Roundabout Trade

Trade involving multiple countries where goods are exported to one country before being re-exported to the final destination.

Double-Coincidence

The situation in a barter economy where two parties each hold an item the other wants, enabling an exact exchange without the need for a medium of exchange.

Commodity Money

Money whose value comes from a commodity of which it is made, such as gold and silver, used historically as a medium of exchange.