Merits of economic value added, Strategic Management

Assignment Help:

Merits of economic value added (EVA):

-  Cash not accounting based measure therefore less distorted for performance measurement.

-  Consistent or goal congruence with profit maximisation e.g. an enforced measure of profitability.

-  Different interest charges (cost of capital) can be applied to divisions e.g. high inherent risk within different industries can have higher cost of capitals applied.

-  Forces managers to consider the cost of financing new investment and to be efficient when managing working capital e.g. minimisation of inventory and excessive cash balances.


Related Discussions:- Merits of economic value added

What are the characteristics of an effective control system, QUESTION S...

QUESTION Strategic decisions are the essence of strategic management. According to Pears & Robinson, typically, strategic issues have certain dimensions. Write short notes on e

What is strategy & why strategy is important?, What Is Strategy & Why Strat...

What Is Strategy & Why Strategy Is Important? Managers at all companies facade three innermost questions in view strategically concerning their companies' current circumstances

Create a chart that plots profit, Excel is often used to perform "what-if" ...

Excel is often used to perform "what-if" analyses. In these, a model that depends on a number of variables is constructed, and the outcomes predicted by the model are determined fo

Strategic managerial communications, The objective of the term project is t...

The objective of the term project is to demonstrate your understanding and ability to apply the body of knowledge covered in this course. The goal will be on identifying communicat

The strategies of the functional areas of an organisation, Discuss the ways...

Discuss the ways in which the strategies of the functional areas of an organisation should support the other levels of strategy. In describing how the functional strategies sup

Statistical procedure for management, A highly perishable drug spoils after...

A highly perishable drug spoils after three days.  That is, a fresh unit on day t may be used on day t, day t+1, and day t+2, but must be disposed of at the end of day t+2. Each

What are the causes of equipment failures, Question 1: (a) What is vi...

Question 1: (a) What is vibration monitoring? Explain, with examples, how can it be useful in industries. (b) Briefly, explain the sources of contaminants which are comm

Quantitative analysis, how has quantitative analysis changed the current sc...

how has quantitative analysis changed the current scenario in the management world today?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd