Which of the following measures of performance is based, in part, on weighted average cost of capital?
A) Return on investment
B) Capital turnover
C) Return on sales
D) Economic value added

Question

Quizplus · Accepted Answer

Economic value added (EVA) is a measure of financial performance that takes into account the cost of capital. It is calculated as the net operating profit after taxes (NOPAT) minus the weighted average cost of capital (WACC) multiplied by the total invested capital. Therefore, EVA is based, in part, on weighted average cost of capital.

Which of the Following Measures of Performance Is Based, in Part