11. Value added to a firm Financial statements reflect only book values of the data, which analysts use to evaluate a company's performance. To incorporate market values, two additional performance measures were developed-market value added (MVA) and economic value added (EVA). Consider this case: Last year, Jackson Tires reported net sales of $80 million and total operating costs (including depreciation) of $52 million. Jackson Tires has $115 million of investor-supplied capital, which has an after-tax cost of 10%. If Jackson Tires's tax rate is 40%, how much value did its management create or lose for the firm during the year? $1.59 million $5.30 million $57.50 million $36.50 million EVA calculates the value added to a firm in a given year. Does that mean that a firm's MVA is the sum of all the EVAS generated by the firm during its life? (Note: Stern Stewart copyrighted the terms MVA and EVA. Other firms use different terms for these concepts, but MVA and EVA are most commonly used in practice.)