When calculating Economic Value Added (EVA),the weighted average cost of capital replaces the target Return on Investment (ROI)as the expected rate of return.

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This statement is true. Economic Value Added (EVA) is a measure of a company's financial performance that takes into account the cost of capital. EVA is calculated as net operating profit after taxes (NOPAT) minus a capital charge, which is the product of the weighted average cost of capital (WACC) and the amount of capital invested in the business. The WACC is used as the expected rate of return instead of the target Return on Investment (ROI) in EVA calculations, as it more accurately reflects the cost of financing the company's operations.

When Calculating Economic Value Added (EVA),the Weighted Average Cost of Capital