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When Cadburys subsidiary in Mumbai, India adopted Economic Value Added (EVA) it added a cost of capital charge to its financial statements. Unused apartments with
When Cadburys subsidiary in Mumbai, India adopted Economic Value Added (EVA) it added a cost of capital charge to its financial statements. Unused apartments with a market value of 4 million pounds generated a charge to the income statements on which manager bonuses were based equal to 15% (the companys cost of capital) or 600,000 pounds. How did this financial change motivate to managers to sell the apartments and was this a good decision?
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