Which of the following adjustments to after-tax operating income is used to approximate cash income for EVA?
A)expensing research and development costs
B)using LIFO inventory method
C)deducting interest payable
D)using taxes paid rather than tax expense

Question

Quizplus · Accepted Answer

Using taxes paid rather than tax expense is the adjustment used to approximate cash income for EVA. This is because tax expense includes non-cash charges such as depreciation and amortization, which do not affect cash flow. Using taxes paid accounts for actual cash paid for taxes.

Which of the Following Adjustments to After-Tax Operating Income Is