The performance measure that uses after-tax operating income and the actual cost of capital employed is
A) return on investment (ROI).
B) residual income.
C) economic value added (EVA).
D) margin.
E) turnover.

Question

Quizplus · Accepted Answer

Economic value added (EVA) measures a company's financial performance by subtracting the cost of capital from its after-tax operating income. This metric is helpful in determining whether a company is creating value for its shareholders, as it takes into account the cost of capital needed to generate profits.

The Performance Measure That Uses After-Tax Operating Income and the Actual