1. Which of the following is true concerning economic value added (EVA)?
It represents the value created after deducting for the cost of both debt and equity capital.
It can be used in performance evaluation and tied to executive compensation.
It is no longer help to use, since it is overly dependent upon cash flow projections.
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
2. Which of the following statements is true concerning market competition and higher returns?
Higher returns are made possible when firms do business in perfectly competitive markets.
Markets consist of competitive barriers that eliminate the possibility of higher returns.
An appropriate corporate strategy would be to create and sustain competitive barriers.
A. I only
B. II only
C. III only
D. I and III only