EVA Encourages the Right Kind of Behavior from Divisions Because

question 13

Multiple Choice

EVA encourages the right kind of behavior from divisions because of its emphasis on

• A)after-tax net income.
• B)total capital employed.
• C)true cost of capital.
• D)before-tax operating income.

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Definitions:

Land Improvements

Enhancements made to a piece of land to increase its value or functionality, such as landscaping, fencing, and adding utilities.

Intangible Assets

Non-physical assets such as patents, copyrights, trademarks, and goodwill.

Trademark

A recognizable sign, design, or expression which identifies products or services of a particular source from those of others, legally registered to claim exclusive rights.

Intangible Assets

Non-physical assets that possess value, such as trademarks, patents, goodwill, and copyrights.