Like return on investment (ROI),economic value added (EVA)adjustments fail to sufficiently address the sub-optimization problem.

Question

Quizplus · Accepted Answer

Both ROI and EVA are ratio-based measures, which can lead to suboptimization as they focus on maximizing the ratio rather than the overall value. This can lead to decisions that improve the ratio but do not necessarily create the most economic value for the company.

Like Return on Investment (ROI),economic Value Added (EVA)adjustments Fail to Sufficiently