EVA or Economic Value Added is:
A) a measure of the amount of profit remaining after accounting for the return expected by the firm's investor's.
B) concerned only with the increase in EBIT.
C) a comparison of the amount of the firm's current value with the amount the current owners paid for it.
D) concerned only with returns based on the original cost of investment for the firm's suppliers of capital.

Question

Quizplus · Accepted Answer

Economic Value Added (EVA) is a financial performance metric that calculates the value created beyond the required return of the company's shareholders. It is the profit earned by the company minus the cost of financing the firm's capital. The idea is to assess the true economic profit of the company.

EVA or Economic Value Added Is