EVA may eventually replace ROI as the standard performance measure.

Question

Quizplus · Accepted Answer

EVA (Economic Value Added) is considered a more comprehensive measure of performance as it takes into account both the cost of capital and the return on investment. This means that it provides a more accurate picture of the value added by a company's operations, and is therefore becoming increasingly popular as a performance measure. ROI (Return on Investment), on the other hand, only measures the return earned on an investment relative to its cost, and does not consider the cost of capital. While ROI will likely remain a widely used performance measure, EVA may eventually replace it as the standard due to its more comprehensive nature.

EVA May Eventually Replace ROI as the Standard Performance Measure