Economic Value Added is a technique that attempts to make the idea of residual income the basis for:
A)decision-making authority.
B)risk-bearing capacity.
C)incentive compensation.
D)activity-based costing.

Question

Quizplus · Accepted Answer

Economic Value Added (EVA) is a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis. It is often used as a basis for incentive compensation because it provides a clear measure of how much value an employee or manager has added to the company beyond the required return of the company's shareholders.

Economic Value Added Is a Technique That Attempts to Make