Economic value added as the instrument for cost management company
The index of economic value added as the instrument for cost management company is considered in the article. It is shown that the positive value added occurs when the return on equity exceeds the cost of equity capital. The feasibility of the use of EVA from the viewpoint of four criteria is evaluated. It is shown that using the index of economic value added we can determine the value of the company with a higher accuracy compared to the methods based on discounted cash flows.