Asked by Amber Hodge on May 10, 2024

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The dollar value of a firm's return in excess of its opportunity costs is called its

A) profitability measure.
B) excess return.
C) economic value added.
D) prospective capacity.
E) return margin.

Opportunity Costs

The cost of foregone alternatives when a decision is made, representing the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Economic Value Added

A measure of a company’s financial performance that calculates the value created beyond the required return of the company’s shareholders.

Dollar Value

Dollar Value is the monetary worth or market value of something expressed in terms of US dollars.

  • Acquire knowledge about Economic Value Added (EVA) and its relevance in analyzing the performance of a firm.
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SP
Sudip PandeyMay 15, 2024
Final Answer :
C
Explanation :
Economic Value Added (EVA) is a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis. It captures the value created in excess of the required return of the company's shareholders.