Question: Steps for finding Economic Value Added (EVA) EVA = NOPAT - After-tax dollar cost of operating capital = EBIT (1-tax rate) - [(Total investor supplied

Steps for finding Economic Value Added (EVA) EVA = NOPAT - After-tax dollar cost of operating capital = EBIT (1-tax rate) - [(Total investor supplied operating capital) (after tax cost of cap) Step 1: Find NOPAT Step2: Find investor supplied operating capital (total operating capital) [see step2 of FCF] TOC = NOWC + Net fixed assets Step3: Find the dollar cost of capital - Multiply TOC by after-tax cost of capital (assume it is 10% in 2015 and 10.3% in 2014) Step 4: Find EVA = NOPAT - dollar cost of capital

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