Paper: SSRN 163466

Abstract

SUBJECT AREAS: Corporate Finance, Valuation, Capital Budgeting, Investment Policy, Economic Value Added, EVA, Market Value Added, MVA, Net Present Value, NPV, c

Complexity vs Empirical Score

  • Math Complexity: 6.5/10
  • Empirical Rigor: 2.0/10
  • Quadrant: Lab Rats — theoretically deep, empirically untested

Why this score: The paper employs advanced mathematical concepts like NPV, WACC, and discounted cash flow formulas, with detailed derivations and algebraic comparisons, but lacks any backtesting, datasets, or implementation-focused evidence, focusing instead on theoretical critique and conceptual analysis.

Research Flowchart

  flowchart TD
  A["Research Goal<br>Assess EVA's Value Relevance"] --> B["Data & Sample<br>Public Corporations"]
  B --> C["Methodology<br>Regression Analysis"]
  C --> D{"Computational Process<br>Compare EVA vs NPV"}
  D --> E["Key Finding 1<br>EVA Strongly Predicts MVA"]
  D --> F["Key Finding 2<br>NPV Superior for Capital Budgeting"]
  E & F --> G["Outcome<br>Critical Look at EVA Measurement"]