What is economic value added (EVA)?
A)The amount of earnings generated above the cost of funds invested to generate those earnings.
B)The same as the rate of return on total assets.
C)The same as the rate of return on shareholders equity.
D)The same as the rate of return on liabilities.

Question

Quizplus · Accepted Answer

Economic value added (EVA) is the amount of earnings generated above the cost of funds invested to generate those earnings. It measures the value a company adds to its shareholders by generating earnings that exceed the cost of capital.

What Is Economic Value Added (EVA)