Measuring the Success of a Divisional Investment Center Is Closely

question 8

Essay

Measuring the success of a divisional Investment Center is closely tied to understanding whether or not the division meets profit expectations.To understand profits,two alternatives are proposed for tracking profitability: ROA and EVA.From the point of view of an economist,why is EVA usually preferred?

---

Definitions:

Iconic Memories

A type of visual memory that lasts very briefly, usually no more than a split second.

Priming

A technique in psychology used to train people's memory in both positive and negative ways by presenting them with one stimulus to influence their response to another stimulus.

Encoding

The initial process of converting information into a form that can be stored in memory, involving sensory input being turned into meaningful data.

Implicit Memory

A form of memory that allows us to carry out activities without consciously recalling past encounters.