[amp_mcq option1=”Extra Value Analysis” option2=”Economic Value Added” option3=”Expected Value Analysis” option4=”Engineering Value Analysis” correct=”option2″]
The correct answer is: B. Economic Value Added (EVA).
EVA is a performance measure used in corporate finance that measures a company’s economic profit. It is calculated as net operating profit after tax (NOPAT) minus the company’s weighted average cost of capital (WACC). EVA is a more accurate measure of a company’s profitability than net income because it takes into account the cost of capital.
A. Extra Value Analysis is not a common term.
C. Expected Value Analysis is a statistical method used to calculate the expected value of a random variable.
D. Engineering Value Analysis is a method used to identify and eliminate unnecessary costs in engineering projects.