One technique a firm can use to improve its economic value added (EVA) is to ____________________.
A) focus on leverage.
B) produce return above the cost of debt.
C) Increase prospective capacity.
D) reduce assets employed.

Question

Quizplus · Accepted Answer

Reducing assets employed can improve EVA by decreasing the capital charge, which is the cost of capital times the capital employed. This increases the net operating profit after taxes (NOPAT) relative to the capital charge, thus improving EVA.

One Technique a Firm Can Use to Improve Its Economic