EVA® (Economic Value Added)

question 104

Multiple Choice

EVA® (economic value added) :

• A) Is another name for return on investment (ROI).
• B) Is generally synonymous with residual income (RI).
• C) Encourages investment center managers to accept new investments that have an ROI greater than the existing ROI of the center.
• D) Of $100,000 for an investment center indicates that the investment center earned $100,000 of after-tax profit for the company as a whole.
• E) Of $100,000 for an investment center indicates that the investment center's economic profit for the period was $100,000.

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Definitions:

Multiplication

A fundamental arithmetic operation that combines two quantities to find their product.

Correct

Free from errors or inaccuracies; to make or set right.

Cent

A unit of currency equaling one hundredth of various dollar bills and other units of currency.

Four-figure Accuracy

A level of precision in numerical representation where only the first four digits are considered significant.