Which of the following actions-all else equal-will decrease a firm's EVA?
A)The firm raises its prices but ships the same amount of product.
B)The firm reduces its inventory.
C)The firm increases its borrowing to repurchase some of its shares.
D)The firm increases its accounts receivable.

Question

Quizplus · Accepted Answer

Increasing accounts receivable ties up more capital in non-productive assets, which can increase the capital charge and decrease EVA.

Which of the Following Actions-All Else Equal-Will Decrease a Firm's