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Flexible Automation and Intelligent Manufacturing,  1997:<br>Proceedings of the Seventh International FAIM Conference

ISBN:
978-1-56700-089-4 (Print)
978-1-56700-442-7 (Online)

ECONOMIC VALUE ADDED BY MANUFACTURING FIRMS

William G. Sullivan
Virginia Polytechnic Institute and State University, Blacksburg, VA

Abstract

Approximately two-thirds of the wealth created by a modern industrialized nation is from its manufacturing sector. This paper discusses a measure for estimating the wealth creation potential of capital investments in manufacturing. The measure, called "Economic Value Added," has recently become popular in the United States and is based on an after-tax analysis of cash flows generated by a capital investment.