The plant manager can improve EVA by:
I. increasing earnings
II. increasing capital employed
III. reducing earnings
IV. reducing capital employed
A) I and II only
B) II and III only
C) III and IV only
D) I and IV only

Question

Quizplus · Accepted Answer

The plant manager can improve EVA by either increasing earnings or reducing capital employed. Therefore, options I and IV are the only ones that will improve EVA. Option II would increase the capital employed and lower EVA unless the increase in earnings offsets the increase in capital employed. Option III would reduce earnings and further reduce EVA.

The Plant Manager Can Improve EVA By