Quiz Ch 04 – T/F EVA Definition
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: EVA is the firm’s adjusted net profit, accounting for the cost of capital.
True or false: EVA is the firm’s adjusted net profit, accounting for the cost of capital.
True or false: The net working capital of a company will decline when outstanding supplier bills are settled with cash.
True or false: To increase a firm’s ROE, leverage must be also increased.
True or false: Market value added is the result of subtracting a firm’s book value from the market value of its equity.
True or false: Market value added and economic value added are synonymous terms.
True or false: The product of the inventory turnover ratio and the average days in inventory are equal to 365.
True or false: Economic value added is also known as residual income.
True or false: An increase in retained earnings reduces the market value added by a firm.
True or false: When the firm is debt-free, ROE is equal to ROC.
True or false: When interest expense is high, the interest earned ratio is also high.