7.Economic Value Added helps firms avoid the hidden-cost fallacy a.By ignoring the opportunity costs of using capital. b.By differentiating between sunk and fixed costs. c.By taking all capital costs into account, including the cost of equity. d.None of the above.

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08-02-2022
Business

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7.Economic Value Added helps firms avoid the hidden-cost fallacy a.By ignoring the opportunity costs of using capital. b.By differentiating between sunk and fixed costs. c.By taking all capital costs into account, including the cost of equity. d.None of the above.

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Parrain Parrain · Answer 1 · 2022-02-17T12:18:19+01:00

The economic value added policy will help avoid the hidden-cost fallacy c.By taking all capital costs into account, including the cost of equity.

What is the Economic Value Added policy?

This involves a means of calculating profit that caters for all capital costs including the cost of equity.

This is important because the cost of equity shows the opportunity cost of investing in a project and so will enable the company to measure the true cost of an investment.

Find out more on economic costs at https://brainly.com/question/16024308.