Question: Here are several questions about economic value added or EVA. a. Is EVA expressed as a percentage or a dollar amount? b. Write down the

Here are several questions about economic value added or EVA.

a. Is EVA expressed as a percentage or a dollar amount?

b. Write down the formula for calculating EVA.

c. What is the difference, if any, between EVA and residual income?

d. What is the point of EVA? Why do firms use it?

e. Does the effectiveness of EVA depend on accurate measures of accounting income and assets?


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