EVA vs. NPV: Uncovering Hidden Value and Redefining Investment Success
The article examines Economic Value Added (EVA) and its comparison to Net Present Value (NPV) in measuring the value created by projects or firms. EVA starts from accounting profit, while NPV starts from net cash flows. The study reveals instances where EVA undervalues the generated value compared to NPV. Different methods for calculating EVA and Market Value Added (MVA) are compared with NPV results, highlighting discrepancies in value estimation.