B Decrease In Costs Economic Value Added Eva Is A Measure Of Financial Performan

B) decrease in costs

Economic Value Added (EVA) is a measure of financial performance based on the concept that all capital has a cost and that earning more than the cost of capital creates value for shareholders. It is after-tax net operating profit (NOPAT) minus a capital charge. It is true economic profit consisting of all costs including the cost of capital. If a companys return on capital exceeds its cost of capital it is creating true value for the shareholder.

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