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Good day.
I have a question in regard to question 1.
Why some expenses on which NOPAT is adjusted are not included in adjustment of capital employed – such as
RD
non cash expenses?I haven’t looked up that specific question, but almost certainly it is because the capital employed in EVA is the OPENING capital employed, so non-cash expenses added back to profit for the year would have no effect on that.
Not using opening capital employed is one of the most common errors in EVA calculations.
Let me know if that doesn’t solve it.
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