Firms with a positive economic value added (EVA) have a(n) ____.
A) increased growth in earnings
B) increasing rate of return on investment
C) return on capital greater than their cost of capital
D) high return on book value

Question

Quizplus · Accepted Answer

Economic value added (EVA) is a financial performance metric that compares the return on invested capital against the cost of that capital. If a firm has a positive EVA, it means that its return on capital is greater than its cost of capital, indicating that the firm’s operations are generating wealth for shareholders. While the other options might be true, they do not accurately describe the concept of EVA.

Firms with a Positive Economic Value Added (EVA) Have A(n)