It combines the logic of the npv model the use of

  • No School
  • AA 1
  • 40

This preview shows page 21 - 28 out of 40 pages.

it combines: the logic of the NPV model the use of accounting data produced by a firm EVA is an estimate of economic profit- the amount by which earning s exceed the required minimum rate of return that investors could get from other securities of comparable risk. if follows the same principles as residual income by deducting from profits a charge for the opportunity cost of the capital invested
Image of page 21
Copyright © ACCAspace.com ACCAspace 中国 ACCA 特许公认会计师教育平台 22 2.Cash based methods Forecasting growth in free cash flows Use of EVA in valuation
Image of page 22
Copyright © ACCAspace.com ACCAspace 中国 ACCA 特许公认会计师教育平台 23 2.Cash based methods Forecasting growth in free cash flows EVA adjustments
Image of page 23