EVA Questions PDF
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Université Paris Dauphine-PSL
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This document contains questions related to Economic Value Added (EVA) methodology and calculation. The questions cover topics such as the variables needed for EVA valuation, statements about EVA compared to DCF, and the formula for calculating EVA. Questions also include practical applications.
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Q1. Which of the following variables are needed for valuation using EVA methodology? I. CAPEX II. Historical growth rates III. Invested capital IV. Unlevered FCF V. Levered beta A. I and II B. I, III and IV C. I, II and V D. II, III, and IV E. I, II, III and V Q2. Which of the following statements i...
Q1. Which of the following variables are needed for valuation using EVA methodology? I. CAPEX II. Historical growth rates III. Invested capital IV. Unlevered FCF V. Levered beta A. I and II B. I, III and IV C. I, II and V D. II, III, and IV E. I, II, III and V Q2. Which of the following statements is correct? A. EVA is a more precise methodology than DCF B. DCF is a more precise methodology than EVA C. DCF is preferred to EVA because EVA does not require sensitivity analysis. D. The growth rate and WACC have a significant impact on EVA valuation. E. None of the above Q3. Assume that a firm has constant perpetual NOPAT of $100m and cost of capital of 10%. To generate this level of NOPAT the firm’s end-year capital has to be $300m each year. Calculate the total value created by this firm. A. $70m B. $100m C. $130m D. $300m E. $400m F. $700m Q4. What is the formula to calculate economic value added? A. Net profit - WACC B. Revenue - (capital invested * WACC) C. Net profit, after tax - WACC D. Net profit, after tax - (capital invested * WACC)
