CFA Practice Question

There are 201 practice questions for this study session.

CFA Practice Question

Which of the following is false?
A. MVA is the market value of the firm (both equity and debt) minus capital contributed (both equity and debt).
B. In EVA analysis, if for a year a firm's net operating profit less adjusted taxes (NOPLAT) exceeds its dollar cost of capital, then for that year the firm has added value for its stockholders.
C. Interest rates and future expectations for a firm have similar impact on EVA and MVA.
Explanation: Interest rates and future expectations for a firm impact MVA but not EVA. EVA is based on accounting measures that consider the past but not the future (which impacts expectations).

User Contributed Comments 1

User Comment
janis36 Should we not use NOPAT (Net Operating Profit After Tax) instead of NOPLAT in answer B?
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