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march/june 2019 -Problem 1 Capital provider

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › march/june 2019 -Problem 1 Capital provider

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by AvatarKen Garrett.
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  • August 21, 2024 at 4:56 pm #710127
    Avatarquytuan
    Participant
    • Topics: 107
    • Replies: 46
    • ☆☆

    The following question relates to question number 1 on march/june 2019 APM exam
    https://cn.accaglobal.com/uploads/talk/20210204165926_1029.pdf.
    “The chief executive officer (CEO) has identified three
    factors which are critical success factors (CSFs) to achieving this objective. These are:
    1. Keep capital providers satisfied;
    2. Build a world-class software development team; and
    3. Ensure that quality of the imaging devices meets market standards”

    I want to ask for part a.”Recommend the key performance indicators and evaluate them as required by the chief executive officer (CEO)”, is EVA a suitable performance indicators for the first CSF: Keep capital providers satisfied?
    The sample answer suggest using return on capital employed (ROCE) which measures the returns to all capital providers as a group. But I think that EVA is more long-term forward looking KPI than ROCE in this scenario.

    August 21, 2024 at 6:22 pm #710134
    AvatarKen Garrett
    Keymaster
    • Topics: 10
    • Replies: 10653
    • ☆☆☆☆☆

    I agree with you that EVA is an important KPI for providers of capital.

    See this article and its conclusion:

    https://www.accaglobal.com/gb/en/student/exam-support-resources/professional-exams-study-resources/p5/technical-articles/economic-value-added-part2.html

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