________ is an economic measure of divisional performance.
A) Return on assets
B) Return on a division's sales
C) Economic value added
D) A division's growth rate

Question

Quizplus · Accepted Answer

Economic value added (EVA) is an economic measure of divisional performance that calculates the excess of profits earned by a division over its cost of capital. It takes into account the division's total capital cost, including equity and debt, and serves as an indicator of the value a division has added to the company. Return on assets and a division's growth rate are not comprehensive measures of economic performance, and return on sales only focuses on profitability without considering the cost of capital.

________ Is an Economic Measure of Divisional Performance