Register
15) A factory manager can improve EVA by A) increasing earnings and increasing capital employed. B) increasing capital employed and reducing earnings. C) reducing earnings and reducing capital employed.
429,549 views
21 votes
21 votes
15) A factory manager can improve EVA by A) increasing earnings and increasing capital employed. B) increasing capital employed and reducing earnings. C) reducing earnings and reducing capital employed. D) increasing earnings and reducing capital employed.

User Sanket Prabhu
by
2.9k points

1 Answer

21 votes
21 votes

Answer: D) increasing earnings and reducing capital employed.

Step-by-step explanation:

Economic Value Added (EVA) shows how much residual income that a company has after it subtracts the cost of the capital invested from the operating profit that the company got.

If a manager wants to increase EVA therefore, they need to reduce the capital used so that the cost of capital will be less. This should be done while earnings are increased for an even higher increase in EVA.

User Thecrentist
by
2.8k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

1.6m questions

2.0m answers

Other Questions

If the rate of inflation in Japan dramatically increases while the rate of inflation in the United States remains constant, then a. the demand curve for dollars shifts to the left. b. the demand curve
If you buy a one-year bond for $4,000 and the issuer pays you back $5,000 at the end of one year, the interest rate on the bond is
Kylie is risk averse and has $1,000 with which to make a financial investment. She has three options. Option A is a risk-free government bond that pays 5 percent interest each year for two years. Option
Elroy Rocket is entering his senior year as an accounting major and has a number of options for his summer break. His options for the 3 month break follow: (1) Work full time at a local accounting firm
In January of the current year, Dora made a gift of stock to her granddaughter. At the time of the gift, the stock was worth $15,000. Several months later in the same year after the gift, a $500 dividend
Link Copied!