Compared to Accounting Profits, Why Is EVA a Better Measure

question 5

Essay

Compared to accounting profits, why is EVA a better measure of a company's performance? What might happen to a manager if his or her plant earns a negative EVA?

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Definitions:

Learned Behaviors

Actions or reactions acquired through experience or conditioning, which do not rely on innate or inborn instincts.

Phobias

Excessive and irrational fears of specific objects, situations, or activities that lead to avoidance behavior.

Free Will

The philosophical doctrine that humans have the capacity to make choices free from certain kinds of constraints.

Reciprocal Determinants

Factors that mutually influence each other, as in the interplay between an individual's behavior, personal factors, and environment.