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Summarize EVA is an estimate of a business's true economic profit for a given year, and it often differs sharply from accounting net income. The
Summarize EVA is an estimate of a business's true economic profit for a given year, and it often differs sharply from accounting net income. The main reason for this difference is that although accounting income takes into account the cost of debt (the company's interest expense), it does not deduct for the cost of equity capital. By contrast, EVA takes into account the total dollar cost of all capital, which includes both the cost of debt and equity capital
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