Residual income calculations are similar to EVA® calculations because in each calculation there is a charge for the division's invested capital which is deducted from a measure of that division's profit.

Question

Quizplus · Accepted Answer

Both residual income and EVA® calculations deduct a charge for the division's invested capital from a measure of profit to determine the amount of value created by the division.

Residual Income Calculations Are Similar to EVA® Calculations Because in Each