1. (TCO G) Which of the following statements is correct?
One way to increase EVA is to achieve the same level of operating income but with more investor-supplied capital.
If a firm reports positive net income, its EVA must also be positive
One drawback of EVA as a performance measure is that it mistakenly assumes that equity capital is free.
One way to increase EVA is to generate the same level of operating income but with less investor-supplied capital.
Actions that increase reported net income will always increase net cash flow
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