Which of the Following Statements About the Economic Value Added $\bold{not}$

question 31

Multiple Choice

Which of the following statements about the economic value added (EVA) performance measure is $\bold{not}$ true?

• A)EVA is a short term financial performance measure of the economic value created over a specific time period.
• B)The formula to calculate EVA uses profit before tax.
• C)Adjustments can be made to the components of the EVA formula to suit the specific circumstances of each division.
• D)Using the EVA performance measure can assist in the minimisation of suboptimal decision making.

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Definitions:

Intangible Costs

Costs that are not directly measurable or quantifiable, such as brand reputation or employee morale.

Composite Score

A calculated metric that combines several individual scores or indicators into a single, overall measurement.

Factor Description

An explanation or elucidation of the elements or influences contributing to a situation or result.

Community Income

The total income generated by all members within a defined community, often used in analyses of economic health or planning.