Economic value added (EVA) assumes that which of the following GAAP expenses would not result in an adjustment to either the income or the capital employed?
A) Research & development costs.
B) Use of process costing rather than job costing.
C) Advertising expenses.
D) Write-off of goodwill.

Question

Quizplus · Accepted Answer

EVA adjustments typically focus on capitalizing expenses that are expected to generate future benefits, like R&D and advertising. The choice of costing method (process vs. job costing) does not affect the capital employed or income adjustments in EVA calculations.

Economic Value Added (EVA) Assumes That Which of the Following