Economic value added research papers

Another positive feature of the VAT is its “border adjustability.” All countries that employ a VAT either exempt exports from the VAT or rebate the entire VAT paid on exports. Similarly, all countries that levy a VAT also levy the VAT on their imports. This has two positive effects. Domestically, all goods sold in a country with a border-adjusted VAT pay the same amount of tax regardless of country of origin. Second, in the global market, a border-adjusted VAT places exports on an equal footing with products from other countries because they will all face the same amount of tax regardless of where they are sold. In contrast, a business income tax raises the relative price of exported goods because it is not rebated like a VAT. Similarly, the individual income tax is rolled into the prices of goods produced by businesses that pay individual income tax instead of business income tax. There is no practical way to rebate the portion of the higher price due to either income tax from the good’s total cost. When a business exports that product it must therefore sell at a higher price, making its product less competitive in global markets.

Economic Value Added ® is a measure of economic profit. Economic Value Added is calculated as the difference between the Net Operating Profit After Tax (NOPAT) and the opportunity cost of invested Capital. This opportunity cost is determined by multiplying the Weighted Average Cost of debt and equity Capital (WACC) and the amount of Capital employed. The formula for Economic Value Added ® is EVA = NOPAT - WACC*Capital Alternatively, we can calculate Economic Value Added ® by multiplying Capital by the difference between the Return on Capital (ROC) and the WACC. EVA = Capital*(ROC - WACC) The two formulas are strictly equivalent and allow us to view EVA from different perspectives.

(1) there are two kinds of value, use and exchange value, but these are commensurable . Use value is what you would be prepared to pay for something, and exchange value is the average market value; use-value can be less but never more than exchange value;
(2) use-value is not of concern to political economy;
(3) (exchange) value is a relative, not an absolute concept.
(4) value is distinguished from price because of the variable "purchasing power of money" and may be measured against an overall general average of other commodities rather than just one (. money);
(5) value fluctuates according to supply and demand around a "natural value".

Economic value added research papers

economic value added research papers

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