Why Might Some Organizations Use Both ROI and EVA in Their

question 5

Essay

Why might some organizations use both ROI and EVA in their performance measures for bonus-based compensation?

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Definitions:

Output

The total amount of goods or services produced by an individual, firm, industry, or economy in a given period.

Production Function

A formula detailing how input factors like raw materials and labor are turned into output or goods.

Inputs

Inputs like workforce, raw materials, and funds that are employed in the manufacturing process to produce products or services.

Output

The total amount of goods or services produced by a business, industry, or country.