# Answer to Question #66334 in Other Economics for Jitender

Question #66334

Write down the formula for value added

Expert's answer

Economic value added is the incremental difference in the rate of return over a company's cost of capital.

The formula for economic value added is:

(Net investment) x (Actual return on investment – Percentage cost of capital)

The formula for economic value added is:

(Net investment) x (Actual return on investment – Percentage cost of capital)

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