The approach of EVA

• Different investment have always some average return
  • The average return is easily achievable
  • Therefore it is not wise to accept lower returns
  • Loosing a part of average return is loosing capital
• Equity has also some alternative return
• The company generates a positive result only after it has earned more than the average return (on the other hand earning a ”zero-result” is completely acceptable achievement if calculated this way)