Which of the following statements is correct?

Question

Quizplus · Accepted Answer

Option A is incorrect because MVA does not give an idea about how much value a firm's management has added during the last year, it measures the difference between the market value of a company and the capital contributed by investors. Option B is partially correct as it defines MVA, but it is not a formula to calculate MVA, rather it gives an idea about the components included in MVA. Option D is incorrect because EVA measures the value added by management over a specific period, not the firm's life. Option C is correct as it defines EVA as Economic Value Added, which measures the value added by a company's management in relation to the capital.

Which of the Following Statements Is Correct