Read:
The Delusion of Profits,
Shao, Minglo – On Profit: Be an Enlightened Executive;
In this article, Mr. Shao opens with a discussion about what ‘profit’ is, where it comes from, and where it goes. In the process he also defines a firm’s economic value added or EVA and discusses how it differs from profit.
Based on the readings, compare and contrast EVA described by Mr. Shao to the EVA described in your textbook. Select a specific type of business (product or service) to help with your explanation.