Which Statement Regarding EVA Is True

question 49

Multiple Choice

Which statement regarding EVA is true?

• 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.

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Definitions:

Grey Market

The trade of goods through distribution channels that are legal but unintended by the original manufacturer.

Surging

In a business context, refers to a rapid increase or spike in demand, activity, or numbers.

Age Cohort

A group of individuals who share a similar age and, typically, have similar experiences, attitudes, and lifestyles.

Baby Boomer Market

The demographic group born between 1946 and 1964, often targeted by marketers for their significant purchasing power.