Traditional financial accounting does not include capital charges, so investors and managers use residual income to determine if the firm is generating returns higher than investor expectations, as opposed to net income.Answer and Explanation:
Differentiate between net income, EPS, EBITDA, net cash flow, NOPAT, free cash flow, MVA, and EVA. What is the primary purpose of each item; that is, when and how is it used? Explain the difference between net cash flow and operating cash flow. What causes t...