39.Carolina Corporation has an after-tax operatingincome of $3,200,000 and a 9% weighted-averagecost of capital. Assets total $7,000,000 and currentliabilities total $1,800,000. On the basis of thisinformation, Carolina's economic value added is: A.$2,408,000. B.$2,732,000. C.$3,668,000.
D.$3,992,000. E.some other amount. Answer: B LO: 2 Type: A 40.The following information relates to Houston, Inc.:Total assets$9,000,000After-tax operating income1,500,000Current liabilities800,000If the company has a 10% weighted-average cost ofcapital, its economic value added would be: 41.Given that ROI measures performance over a periodof time, invested capital would most appropriately befigured by using: 42.When an organization allows divisional managers tobe responsible for short-term loans and credit, thedivision's invested capital should be measured by 43.Hayes Division has been stagnant over the past fiveyears, neither growing nor contracting in size andprofitability. Investments in new property, plant, andequipment have been minimal. Would the division'suse of total assets (valued at net book value) whenmeasuring ROI result in (1) using numbers that areconsistent with those on the balance sheet and (2) arising ROI over time? Consistent with Numberson the Balance Sheet?Produce a Rising Return onInvestment Over Time?A.YesYes B.YesNo C.NoYes D.NoNo E.YesNeed more information tojudge Answer: A LO: 5 Type: RC 44.The income calculation for a division manager's ROIshould be based on: 45.To partially eliminate the problems that are associatedwith the short-term focus of return on investment,residual income, and EVA, the performance of adivision's major investments is commonly evaluatedthrough: