Which of the following statements is CORRECT?   a. One drawback of EVA as a performance measure is that it mistakenly assumes that equity capital is free.     b. Actions that increase reported net income will always increase cash flow.     c. One way to increase EVA is to achieve the same level of operating income but with more total invested capital obtained at a higher cost of capital.     d. If a firm reports positive net income, its EVA must also be positive.     e. One way to increase EVA is to generate the same level of operating income but with less

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Which of the following statements is CORRECT?
  a. One drawback of EVA as a performance measure is that it mistakenly assumes that equity capital is free.  
  b. Actions that increase reported net income will always increase cash flow.  
  c. One way to increase EVA is to achieve the same level of operating income but with more total invested capital obtained at a higher cost of capital.  
  d. If a firm reports positive net income, its EVA must also be positive.  
  e. One way to increase EVA is to generate the same level of operating income but with less total invested capital.
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