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EVA calculates the value added to a firm in a given year. Does that mean that a firm’s MVA is the sum of all the EVAs generated by the firm during its life? (Note: Stern Stewart copyrighted the terms MVA and EVA. Other firms use different terms for these concepts, but MVA and EVA are most commonly used in practice.)

Respuesta :

Answer:

False

Explanation:

There are two financial performance measures for an investor i.e. market value added (MVA) and the economic value added (EVA). These both are to be used for the cost of equity capital

There is a direct relationship between the MVA and EVA. The MVA deals in the present value of the estimated future EVA and can be think as a net present value

Therefore the given statement is false, It is the total of all EVAs present value

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