Which of the Following Statements Is True Concerning Economic Value

question 25

Multiple Choice

Which of the following statements is true concerning economic value added?

• A) A growing number of firms tie managers' compensation to EVA.
• B) A profitable firm will always have a positive EVA.
• C) EVA recognizes that the cost of capital is not a real cost.
• D) If a firm has positive present value of growth opportunities, it will have positive EVA.

Understand the client's role in assessment and planning processes.

Understand the concept of net working capital and factors that influence its calculation.

Describe the difference between temporary and permanent working capital.

Identify and explain the components of net working capital.

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Definitions:

Short Term Liabilities

Short Term Liabilities are obligations a company needs to pay within a year, including loans, accounts payable, and other debts.