Statements about economic value added

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Reference no: EM131965848

1. Suppose that two hospitals are identical in all ways except that Hospital N is relatively new while Hospital O is relatively old. Which of the following statements about a comparative financial statement analysis is most correct? (Hint: Think about the differences in the amount of net fixed assets carried on the balance sheet and the amount of depreciation expense reported on the income statement.)

A) Hospital N will report the higher net income

B) Hospital N will have the higher total asset turnover

C) Hospital N will have the higher fixed asset turnover

D) None of the above statements is correct

2. Which of the following statements about economic value added (EVA) is most correct?

A) EVA is useful only for investor-owned (for-profit) businesses

B) EVA gives insights into how managers can increase the economic value of the organization.

C) EVA does not include any social value created by the organization

D) Both b. and c. are correct

E) Answers a., b., and c. are all correct

Reference no: EM131965848

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