P5 points to note

While the economic value added (EVA) and residual income ( RI) methods of performance evaluation bear much similarities as they both involve deducting an imputed interest charged on the net asset when calculated, they are quite different in the following ways.
1. Profit used in EVA is Net operating profit after tax (NOPAT) with adjustments for capital items, depreciation, provisions, operating lease etc, while RI is based on PBIT

2. Imputed charges (notional interest ) are based on WACC for EVA while for RI, they are based on applicable cost of capital

3.Net asset in computing EVA are valued at replacement cost (with adjustment for cost to be capitalised, I.e research and developments exp) while RI is based on the accounting net asset