Which of the following statements is false?
A) The distinction between simply making money and creating value is the essence of the NPV calculation.
B) The concept of economic profit has been popularized recently under the name Economic Value Added (EVA).
C) EVA is a measure of value created over the life of a project.
D) The EVA investment rule can be stated as "accept any investment opportunity in which the present value of all future EVAs is positive."

Question

Quizplus · Accepted Answer

EVA is not a measure of value created over the life of a project. It is a measure of value created in a specific period, usually a year, and subtracts from the accounting profit a charge for the cost of capital employed in the project. Therefore, statement C is false.

Which of the Following Statements Is False