The Primary Limitation of Using Economic Value Added (EVA $\rarr$ )To Evaluate the Financial Performance of Investment Centers Is:
A)Complexity

question 85

Multiple Choice

The primary limitation of using Economic Value Added (EVA $\rarr$ ) to evaluate the financial performance of investment centers is:

• A)Complexity of the calculation.
• B)Dysfunctional long-term investment decisions that can be motivated by focusing on EVA\(\rarr\).
• C)Failure to include a measure of invested capital.
• D)Inability to use EVA\(\rarr\) to benchmark against competitor organizations.
• E)Inability to align managerial incentives with ownership interests.

---

Definitions:

Short-tempered

Having a tendency to become angry or irritated easily.

Genetics

The study of genes, heredity, and variations in organisms, explaining how traits are passed from parents to offspring.

Temperament

An individual's innate personality traits and characteristic ways of reacting to the environment, often noticeable from infancy.

Second-born

Refers to the child that is born second in order within a family, following the first-born.