In financial valuation, EVA means __________________.a.Ergonomic Value Addedb.Economic value of assetsc.Economist Valuation of Assetsd.Economic Value Added

In financial valuation, EVA means d. Economic Value Added.

Economic Value Added (EVA) is a financial performance measure that calculates the value created beyond the required return of the company's capital. It is derived from the concept that a company only adds value when it earns a return higher than its cost of capital. EVA is often used to assess the efficiency of a company's use of its capital and is a key indicator for managers to make investment decisions. The formula to calculate EVA is:

$\text{EVA} = \text{NI} - (\text{Capital} \times \text{Cost of Capital})$

Where:

• $\text{NI}$ is Net Income,
• $\text{Capital}$ is the capital invested in the business,
• $\text{Cost of Capital}$ is the required rate of return on investment.

This measure guides management in creating shareholder value.