Divisional Performance Measurement Economic Value Added (part b) Example 5

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  1. Avatar of garbaroleksandr garbaroleksandr says:
    April 3, 2013 at 10:53 am

    sorry for miscalculation in previous post
    the opening cap employed in 2007 should have been 400+16+20 =436
    any suggestions why he haven’t added back non cash item to opening cap empl in 2007
    thanks

  2. Avatar of garbaroleksandr garbaroleksandr says:
    April 3, 2013 at 10:14 am

    hi there
    can someone explaine me why other non cash items(in year 2006) amounted to 20 m have NOT been added back to capital employed. My logic is that the opening balance of capital employed in year 2007 is 506(book value)+16(lease in 2006)+20(non cash items in 2006) = 542! not 522
    thanks in advance!

  3. Avatar of mscoolicemui mscoolicemui says:
    March 24, 2013 at 4:25 pm

    now I know how to do an EVA question

  4. Avatar of cherylc cherylc says:
    September 25, 2012 at 2:46 am

    Great stuff………….EVA is way clearer now.

  5. Avatar of Mpampoulas Mpampoulas says:
    June 13, 2012 at 6:49 pm

    no he didn’t… check again 17th minute ;-)

  6. Avatar of swing1985 swing1985 says:
    June 12, 2012 at 3:23 pm

    can someone explain to me why balance sheet value for 2007 he use 506 but when 2006, he use 350? if the logic is to use the open value, isnt that 2007 balance sheet value should be 400 + 16 m capitalise lease instead of 506 + 16 m? pls help!! thanks a lot

  7. Avatar of meesammeesam meesammeesam says:
    May 27, 2012 at 2:30 pm

    i agree with adotey here, why havent we used the actual balance sheet numbers when calculating WACC, why the ideal gearing structure of 70:30?

    • Avatar of johnmoffat johnmoffat says:
      May 27, 2012 at 4:37 pm

      @meesammeesam, There is an argument for using the current capital structure (although market values – never balance sheet values).
      However, the logic is that we really need the cost of future capital (not the existing – the existing capital is already invested whether good or bad) and that is why the gearing that they are aiming for is more sensible. (Also, that example was ‘stolen’ from an examiners article and he used 70:30)

  8. Avatar of farie farie says:
    May 18, 2012 at 9:01 pm

    This message appears whe I try to play these lectures:
    Server not found: rtmpt://r.acca.opentuitioncom.netdna-cdn.com:80/play

    • Avatar of admin admin says:
      May 18, 2012 at 10:52 pm

      lectures work ok, your problem relates most likely to firewall, your home/office or internet provider firewall,
      please contact your internet provider to look into this

  9. Avatar of putisaduo putisaduo says:
    May 11, 2012 at 3:46 pm

    More clear than before on EVA. Thanks a lot!

  10. Avatar of serawanja serawanja says:
    April 13, 2012 at 8:54 pm

    The lecture so clear. thanks

  11. Avatar of mahia mahia says:
    January 28, 2012 at 5:52 pm

    i am just weeping… how lovely lecture this is

  12. Avatar of sunday sunday says:
    December 7, 2011 at 9:19 am

    Great lecture. He has made is simpler for me.
    Many thanks.

  13. Avatar of adotey adotey says:
    November 5, 2011 at 9:55 am

    Great lecture!. Love it.
    I however, have one question that is bordering me.
    why do we use the target capital structure and not the actual/current capital structure of the entity.
    Thanks.

  14. Avatar of teong7035 teong7035 says:
    October 5, 2011 at 2:20 pm

    is this note still applicable for December 2011 exams?

  15. Avatar of bvp123 bvp123 says:
    September 2, 2011 at 9:10 pm

    excellent lecture!

  16. Avatar of financialanalyst financialanalyst says:
    August 18, 2011 at 6:47 am

    Can any one please re-explain why we added leases here?

  17. Avatar of keneisha keneisha says:
    June 7, 2011 at 5:34 am

    thank u…lecture very good

  18. Avatar of helen0804 helen0804 says:
    December 4, 2010 at 12:42 pm

    so good, thanks a lot

  19. Avatar of dmxmike dmxmike says:
    November 14, 2010 at 6:45 pm

    absolutely genious lecturer. Thank you very much.

  20. Avatar of accaite accaite says:
    November 14, 2010 at 11:05 am

    Amazing, thank you very much for such a great lecture on EVA! I had tried learning the ‘tricks’ but didnt know the whole idea behind it and this lecture has just made it all clear to me!

    Anyone knows whats the name of the lecturer?

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