New project evaluation rule: Positive EVA means project accepted, negative EVA means rejected.
The article shows that Economic Value Added can be used to evaluate projects effectively. Market Value Added and Net Present Value are equivalent for project evaluation with the same discount rates. Annual Equivalent Economic Value Added and Net Annual Value are the same for project evaluation. If Annual Equivalent Economic Value Added is positive, the project is accepted; if negative, it is rejected. This rule was confirmed by applying it to an investment project. Economic Value Added analysis considers capital cost and tax effects in project evaluation, providing additional benefits.
