Why Are Accounting Distortions Removed When Evaluating Performance Using EVA

question 43

Multiple Choice

Why are accounting distortions removed when evaluating performance using EVA?

• A)To remove amounts that are a free source of financing
• B)To remove amounts that divisional managers are unable to control
• C)To remove the costs of assets that must be capitalized under GAAP
• D)To encourage managers to spend money on elements that will benefit the company in the long run

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