PRIN.OF CORPORATE FINANCE
PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
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Chapter 12, Problem 18PS

EVA Here are several questions about economic value added or EVA.

  1. a. Is EVA expressed as a percentage or a dollar amount?
  2. b. Write down the formula for calculating EVA.
  3. c. What is the difference, if any, between EVA and residual income?
  4. d. What is the point of EVA? Why do firms use it?
  5. e. Does the effectiveness of EVA depend on accurate measures of accounting income and assets?
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