Is it possible to have positive EVA but negative ROE? ---------------------- Which of the following statements most accurately explains the relationship between profitability and wealth creation? For a firm to create wealth for its shareholders it: A) necessarily needs to have positive ROE; it may or may not have positive EVA. B) necessarily needs to have positive economic value added (EVA); it may or may not have positive return on equity (ROE). C) necessarily needs to have positive EVA and positive ROE. D) does not necessarily need to have positive EVA or positive ROE. Your answer: C was incorrect. The correct answer was B) necessarily needs to have positive economic value added (EVA); it may or may not have positive return on equity (ROE). For a firm to create wealth for its shareholders it necessarily needs to have positive EVA; it may or may not have positive ROE.
Ya. Econ vs Acct income.
answer C is not correct.