This question deals with summary financial performance indicators for investment centers.
Required:
1. Discuss the similarities among ROI, residual income (RI), and EVA®.
2. In what sense is EVA® similar to and in what sense is it distinct from residual income (RI)?
3. Present the equation for calculating EVA® and provide a brief discussion of the elements that go into the calculation of EVA®.
4. What are the two approaches that can be used to estimate the two major components of EVA®? Which of these two approaches is superior?

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The Answer of This question deals with summary financial performance indicators for investment centers.
Required:
1. Discuss the similarities among ROI, residual income (RI), and EVA®.
2. In what sense is EVA® similar to and in what sense is it distinct from residual income (RI)?
3. Present the equation for calculating EVA® and provide a brief discussion of the elements that go into the calculation of EVA®.
4. What are the two approaches that can be used to estimate the two major components of EVA®? Which of these two approaches is superior?

This Question Deals with Summary Financial Performance Indicators for Investment