1. The following statements are correct for the Economic Value Added (EVA), except, A. The most conventional way to determine the value of the asset is through its economic value added. B. Economic value Added (EVA) is a convenient metric in evaluating investment as it quickly measures the ability of the firm to support its cost of capital using its earnings C. EVA is the excess of the company’s equity after deducting the cost of capital. D. The general concept here is that higher EVA is better for the firm
Multiple Choice Questions
1. The following statements are correct for the Economic Value Added (EVA), except,
A. The most conventional way to determine the value of the asset is through its economic value added.
B. Economic value Added (EVA) is a convenient metric in evaluating investment as it quickly measures the ability of the firm to support its cost of capital using its earnings
C. EVA is the excess of the company’s equity after deducting the cost of capital.
D. The general concept here is that higher EVA is better for the firm
2. Ernesto, Inc. has projected average earnings every year of P 100 million. Debt to Equity Ratio is 3:1. After tax cost of debt is 5% while
A. 5 Million
B. P 50 Million
C. P 0
D. P 25 Million
3. SPRO Corp is planning to expand and new projects is expected to have an EVA of P200,000. The annual coast of capital at 10% amounts to P400,000. What is the average monthly earning projected for this project?
A. 600 000
B. 50 000
C. 60 000
D. 500 000
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