A performance measurement system that emphasizes the income earned over and above the income required to cover the cost of capital is:

Question

Quizplus · Accepted Answer

Economic value added (EVA) measures the company's financial performance by subtracting the cost of capital from its operating profit. It emphasizes the value that the company creates for its investors and shareholders by earning more than what is needed to cover the costs. Operating profit (A) simply measures the profit generated by the business operations. Return on investment (C) measures the return on the money invested by the shareholders, while return on income (D) is not a recognized performance measurement system.

A Performance Measurement System That Emphasizes the Income Earned Over