Which statement about the relationship between the Economic Value Added (EVA) spread and the spread between the Weighted Average Cost of Capital (WACC) and Cash Flow Return on Investment (CFROI) is least accurate? A) Both spreads measure the creation of value. B) Both spreads are based on the WACC. C) WACC – CFROI will be positive when the EVA spread is positive. D) Both spreads measure the creation of economic profit
C. CFROI-WACC will be positive when teh EVA spread is positive.
but the question says WACC minus CFROI??
yep… least accurate… C
man, this “least” is always an oversight for me. Thanks bud!
C for Cha-Cha-Cha