7. The relationshlp between the book value of shareholders' equltyand the firm's Market Value Added (MVA) and Economic Value Added (EVA) Yesterday, Water and Power Co. released its 2018 annual report on the company's website. While reading the report for his boss, Josh came across several terms about which he was unsure. He leaned around the wall of his cubicle and asked his colleague, Mia, for help. JOSH: Mia, do you have a second to help me with my reading of Water & Power's annual report? I've come across several unfamiliar terms, and I want to make sure that I'm interpreting the data and management's comments correctly. For example, one of the footnotes to the financial statements uses "the book value of Water & Power's shares," and then in another place, it uses "Economic Value Added." I've never encountered those terms before. Do you know what they're talking about? MIA: Yes, I do. Let's see if we can make these terms make sense by talking through their meaning and their significance to investors. 1 The term book value has several uses. It can refer to a single asset or the company as a whole. When referring to an individual asset, such as a piece of equipment, book value refers to the asset's adjusted for any accumulated depreciation or amortization expense. The v value, or difference between the machine's historical cost and its accumulated depreciation expense, is called its book value. as reported in In contrast, when the term refers to the entire company, it means the total value of the company's