EVA (Economic Value Added) measures shareholder value by deducting

EVA (Economic Value Added) measures shareholder value by deducting

EVA (Economic Value Added) measures shareholder value by deducting:

A. Total operating expense only

B. Cost of invested capital from NOPAT

C. Income tax expense from gross profit

D. Total variable cost from sales

Answer: B

Rationale: EVA=NOPAT-Capital Employed×WACC; deduct full capital cost to reflect real economic profit.