Economic Value Added-Performance Evaluation

Problem
A program that will compute for the Economic Value Added for a division when implementing
new investments as performance evaluation of investment centers and the manager
responsible.

Program
#include <iostream>
#include<math.h>
using namespace std;
void main()
{
long int num1, num3,num6,num8;
double num2, num4, num5, num7;
char name1[50],name2[30];
cout<<"___________________________________________________"<<endl;
cout<<endl;
cout<<" Computation of Economic Value Added (EVA)"<<endl;
cout<<endl;
cout<<"Division Name: ";
cin.getline (name1,50);
cout<<"Balance Sheet Date: ";
cin.getline (name2,30);
cout<<endl;
cout<<"Net Income Before Tax: ";
cin>>num1;
cout<<"Tax Rate(in decimal): ";
cin>>num2;
cout<<"Operating Assets: ";
cin>>num3;
cout<<"Weighted Cost of Debt(in decimal): ";
cin>>num4;
cout<<"Weighted Cost of Capital(in decimal): ";
cin>>num5;
cout<<endl;
 cout<<"-------------------------------------------------------------------------------"<<endl;
cout<<endl;
num6=num1-num1*num2;
cout<<"Net Income after Tax: "<<num6<<endl;
num7=num5*100+num4*100-num4*num2*100;
cout<<"Weighted Average Cost of Capital: "<<num7<<"%"<<endl;
cout<<endl;
cout<<"------------------------------------------------------------------------------"<<endl;
cout<<endl;
num8=num6-num7*num3*0.01;
cout<<"The Economic Value Added (EVA) of "<<name1<<" for the period ending
"<<name2<<" is P"<<num8<<"."<<endl;
}

Output
 Discussions

For creating a program and source file see Discussion of Activity 1 and for
introduction of the main program, introduction of variables and input of characters involving
personal information, see Discussion of Activity 4.
An additional information on introduction of variable which is long int which enable
the program to display millions. Thats why Net Income before Tax, Net Income after Tax,
Operating Assets and Economic Value Added(EVA) are introduced as such.
After the information which is the Division Name and Balance Sheet Date are
entered, proceed to the program which accepts the Net Income before Tax, Tax rate,
Operating Assets, Weighted Cost of Debt and Weighted Cost of Capital.
After requiring the numbers, the formula for Net Income after Tax and Weighted
Average Cost of Capital(WACC) will be required to compute for EVA.
For computation of Net Income after Tax, we have to multiply the Net Income Before
Tax to (1-Tax rate).After Tax means multiply it by (1-Tax rate). And for the computation
WACC, we have to add the After Tax Weighted Cost of Debt and Weighted Cost of Capital.
The answer will be displayed after each formula together with the label (e.g. cout<<Net
Income After Tax: <<num6;).
Economic Value Added (EVA) is important because it is used as an indicator of how
profitable company projects are and it therefore serves as a reflection of management
performance. The idea behind EVA is that businesses are only truly profitable when they
create wealth for their shareholders, and the measure of this goes beyond calculating net
income. Economic value added asserts that businesses should create returns at a rate
above their cost of capital. So the computation of EVA is the product of Operating Assets
and WACC subtracted from Net Income After Tax.
The final output is displayed according to your discretion like that entered in the
program.
For ending the main program, see Discussion of Activity 4.
Note that the design of the program depends on your choice. It may include spaces
and lines as separation.
Start the program(See Discussion of Activity 1).

Source: http://www.investinganswers.com/financial-dictionary/financial-statement-
analysis/economic-value-added-eva-2925