Economic Value Measurement: Investment Recovery and Value Added - Irva

Working Paper No. 7

20 Pages Posted: 26 Apr 2000

See all articles by Ignacio Velez-Pareja

Ignacio Velez-Pareja

Grupo Consultor CAV Capital Advisory & Valuation

Date Written: February 2001

Abstract

In Velez-Pareja, (1999b and 1999c), some difficulties of EVA as an approach for the measurement of economic added value were considered. In those papers, the use of real economic value added based on the real free cash flow was suggested. This means the real cash flow calculated from the immediately previous period. In Velez-Pareja (1999a and 2000), a methodology was presented to determine and to construct the free cash flow of a firm. The present article studies based on the previous works, an indicator of value added derived from the real free cash flow.

Keywords: Free cash flow, firm evaluation, firm valuation, investment valuation, Net Present Value (NPV), Economic Value Added (EVA)

JEL Classification: G12, G31, J33, M40, M41, M46

Suggested Citation

Velez-Pareja, Ignacio, Economic Value Measurement: Investment Recovery and Value Added - Irva (February 2001). Working Paper No. 7. Available at SSRN: https://ssrn.com/abstract=223429 or http://dx.doi.org/10.2139/ssrn.223429

Ignacio Velez-Pareja (Contact Author)

Grupo Consultor CAV Capital Advisory & Valuation ( email )

Ave Miramar # 18-93 Apt 6A
Cartagena
Colombia
+573112333074 (Phone)

HOME PAGE: http://cashflow88.com/decisiones/decisiones.html

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