Question

Mary is recommending IT investments in the neighborhood of $250 million for her company. However, the board is hesitant since it’s such as capital-intensive project. If the project fails the company could go out of business. What financial calculation should they use?

Answer 1

Answer: EVA (Economic value added)

Step-by-step explanation:

The economic value added is one of the type financial based concept that helps in understanding the various types of economical based values and also estimating the economical benefit of an organization.

The main purpose of economical value added is that it helps in measuring the overall financial based performance of the company by calculating the overall capital cost and it is also known as the economic advantage.

According to the given question, the EVA is one of the financial based calculating that Mary opt for earning the investment process in the company. Therefore, Economic value added is the correct answer.