The results for the last year of Pacham plc are shown below:

	000s
Profit before tax and interest	400,000
Interest expense	40,000
Profit before tax	360,000
Tax at 20%	72,000
Profit after tax and interest	288,000

There is no significant difference between economic depreciation and accounting depreciation

Amortisation of goodwill amounted to 2,500,000 in the year. The accumulated amortisation at the beginning of the year was 4,000,000

900,000,000 capital employed at the start of the year

120,000 accrued expenses at the start of the year, 200,000 at the end

1,250,000 provision for doubtful debts at the start of the year, 1,100,000 at the end

The weighted average cost of capital is 7.5%.

Required

Calculate the Economic Value Added, and discuss the aims of the approach and the reasons for the adjustments made.