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Economic Value Added (EVA)
A corporate performance measurement and analysis technique that stresses the importance of cash flow increments above the market-determined weighted average cost of capital. Often stated as:
EVA = NOPAT - (Capital X WACC) where NOPAT = Net Operating Profit After Tax and WACC = Weighted Average Cost of Capital.
Comparison of the EVA and Franchise Factor literature is often useful. See also Net Operating Profit After Tax (NOPAT), Weighted Average Cost of Capital (WACC).
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Glossary *
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