EVA is used for:
I. Measuring performance within the firm II) Rewarding performance within the firm
III. Improving performance within the firm
A) I only
B) II only
C) I and II only
D) I, II, and III

Question

Quizplus · Accepted Answer

EVA (Economic Value Added) is used for measuring performance within the firm, rewarding performance within the firm, and improving performance within the firm. It is a financial performance measure that calculates the amount of value created by a company above the cost of capital used to generate that value. By using EVA, a firm can identify areas where its performance is not meeting the expectations, and take steps to improve it. EVA also helps in rewarding employees, as it measures their contribution to the firm's value creation, rather than just their revenue generation.

EVA Is Used For