As long as EVA is positive, the firm's managers have used the invested capital to create additional value for shareholders.

Question

Quizplus · Accepted Answer

EVA, or Economic Value Added, is a measure of a firm's profitability that takes into account the cost of capital. If EVA is positive, it means that the firm's earnings are higher than the cost of the capital invested in the business. This indicates that the managers have used the invested capital effectively to create additional value for shareholders.

As Long as EVA Is Positive, the Firm's Managers Have