The following are disadvantages of using EVA as a performance measure EXCEPT:
A)EVA does not measure present values.
B)EVA rewards the choice of projects with quick paybacks and penalizes projects with longer payback periods.
C)EVA reduces explicit monitoring by top management.
D)EVA is difficult to apply to start-up ventures.

Question

Quizplus · Accepted Answer

This statement is incorrect because EVA actually increases explicit monitoring by top management through the use of a standardized performance measure. The other three statements are disadvantages of using EVA as a performance measure.

The Following Are Disadvantages of Using EVA as a Performance