Economic Value Added is defined as

Question

Quizplus · Accepted Answer

Economic Value Added (EVA) is a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit (adjusted for taxes). It is the accounting profit net of the minimum return on invested capital demanded by the firm's investors. EVA is different from economic profit as the latter subtracts both explicit and implicit costs, while EVA only subtracts the cost of capital. Therefore, option C is the correct answer.

Economic Value Added Is Defined as