How do you calculate Economic Value Added?

Answer 1

This is can be solved in different ways: The simple one is MVA the market value added which is Market value capital - Caplital investment. Another way is derive the economic values of revenue and cost items. That mean you don't deal with actual market value but you need some to convert these values into their economic or efficiency ones.

Answer 2

Economic Value Added is the value added by management to the capital provided by shareholders. It is a period value. EVA is defined as net operating profit after tax less a capital charge reflecting the firm’s cost of capital.
For instance, assume a company has net operating profits after taxes of $1,000,000 for the year, Net Capital of $500,000 and cost of capital of 12%. The capital charge would be determined by multiplying the cost of capital times the net capital – in this case 12% times $500,000 for a capital charge of $60,000.
The charge would be deducted from the net operating profits after taxes after taxes - $1,000,000 - $60,000. Therefore, the EVA for that year would be $940,000.