Which of the following measures of performance is, in part, based on the weighted-average cost of capital?
A) Return on investment.
B) Capital turnover.
C) Book value.
D) Economic value added (EVA).
E) Gross margin.

Question

Quizplus · Accepted Answer

Economic Value Added (EVA) is a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis. The cost of capital is often measured using the weighted-average cost of capital (WACC), making EVA partly based on WACC.

Which of the Following Measures of Performance Is, in Part