Coke Vs. Pepsi

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Issue:

Business

 

Written by:

Tina M

 

Date added:

December 27, 2012

 

Level:

 

Grade:

A

 

No of pages / words:

5 / 1375

 

Was viewed:

3883 times

 

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Essay content:

EVA is simply the after-tax operating profit minus the total annual cost of capital. Using EVA has advantages as well as disadvantages. Advantages · EVA sends the message than managers should invest only if the increase in earnings is enough to cover cost of capital · EVA allows a good way for companies to set a reward system that is not overly expensive to implement because is not too difficult for top management to monitor...
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Coca-Cola's NOPAT has decreased in recent years as a result of slowing sales growth and worsening profit margins. If it were not for Coca-Cola's decreasing WACC, its EVA would decrease more rapidly. If Coca-Cola used a WACC of 12%, about the average of the past seven years, its EVA would have been $445,000,000 in 2000...
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