Which of the Following Statements Is CORRECT

question 70

Multiple Choice

Which of the following statements is CORRECT?

• A) One way to increase EVA is to achieve the same level of operating income but with more investor-supplied capital.
• B) If a firm reports positive net income, its EVA must also be positive.
• C) One drawback of EVA as a performance measure is that it mistakenly assumes that equity capital is free.
• D) One way to increase EVA is to generate the same level of operating income but with less investor-supplied capital.
• E) Actions that increase reported net income will always increase net cash flow.

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Definitions:

Americans

Citizens or nationals of the United States of America, a country comprising 50 states and various territories.

1920s

The decade spanning from 1920 to 1929, characterized by significant social, economic, and cultural changes following World War I.

Punishment

A stimulus or event that decreases the likelihood of the behavior that it follows occurring again in the future.

Negative Reinforcers

Stimuli whose removal following a behavior increases the likelihood of that behavior being repeated in the future.