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Chapter 9

7.2 Measures used in VBM

1 EVA

 Primary measure

 A positive EVA
indicates value
creation

3 SVA (shareholder 2 MVA (market value
value added) added)

 Uses discounted  Accumulated EVAs
cash flow techniques generated since
3 key organisation was
 Values whole measures formed
business rather than
one project

7.3 Implementing VBM

Steps:

1 Strategy developed to maximise value

2 Key value drivers identified and targets set

3 Plan developed to achieve targets

4 Performance metrics and rewards for all levels of staff aligned to targets

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