Which of the following performance measures uses after-tax operating income and the actual cost of capital employed?
A)return on investment (ROI)
B)residual income
C)economic value added (EVA)
D)margin

Question

Quizplus · Accepted Answer

Economic value added (EVA) uses after-tax operating income and the actual cost of capital employed. It measures the dollar amount of value added by a business after accounting for the cost of financing its operations. ROI measures profitability relative to the amount of investment, residual income measures profits in excess of a minimum acceptable return, and margin measures the percentage of revenue remaining after deducting all costs.

Which of the Following Performance Measures Uses After-Tax Operating Income