Which of the following most effectively uses cost of capital as part its measure of company performance?
A)EVA
B)Net income
C)ROA
D)ROE

Question

Quizplus · Accepted Answer

Economic Value Added (EVA) takes into account the cost of capital as a measure of company performance. It indicates how much value a company is creating for its investors after paying off all the costs associated with funding the company's operations. Other options like net income, ROA and ROE do not necessarily reflect the cost of capital and can be misleading measures of performance.

Which of the Following Most Effectively Uses Cost of Capital