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:

Anal Fixation

In psychoanalytic theory, a fixation at the anal stage of development that can lead to personality traits such as obsessiveness, stinginess, or messiness in adulthood.

Autonomy

The capacity to make an informed, uncoerced decision or the state of being self-governing and independent.

Erikson

A developmental psychologist known for his theory on the psychosocial development of humans.

Defense Mechanism

Psychological strategies brought into play by individuals, groups, or even nations to cope with realities and to maintain self-image.