A manager can improve the economic value of an investment center by decreasing assets.

Name: A manager can improve the economic value of an investment center by decreasing assets.
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Question

Quizplus · Accepted Answer

Decreasing assets will lead to a higher return on investment (ROI) and thus increase the economic value added (EVA) for the investment center. This is because ROI is calculated as operating income divided by the average invested capital, and reducing the denominator (assets) will increase the ROI.

A Manager Can Improve the Economic Value of an Investment