difference economic profit and EVA?

CFA Level II Equities
#1

Dear all … for those working with Schweser : if we look at Study session 8 page242 we read Economic profit is EP = NOPAT - $WACC.

all fine

but then in session 12 - chapter 37 page 227 we read EVA = NOPAT - (WACCxtotal capital)

in that chapter we read about the difference between residual income and EVA but not what the difference is between economic profit and EVA… can someone help here?

#2

PS I did go through the posts but no clear answers… according to the formula in the book it should be the same … hence my question

#3

They are the same thing, that’s why.

#4

thanks!

#5

Yepp… $WACC = in monetary units expressed cost of total capital. May be £WACC or ¢WACC instead.