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INTC 38.16+2.5%Nov 7 9:30 AM EST

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To: Harry Landsiedel who wrote (664)8/24/1997 6:41:00 PM
From: Fred Fahmy   of 990
 
Harry,

I believe the concept you are referring to is similar to EVA (economic value add) or what we call in our compnay SVA (shareholder value add). I don't disagree that capital requirements should be taken into accout. However, for many non-manufacturing companies you also have to give back cash to keep growing or to just stay at the same level. The only difference is that the money may have to be used for something less tangible, like advertising. Many manufacturing companies don't have to spend any money on adverstising. Depending on the business adverstising may be significantly more costly than captial equipment. I guess my point is that if you want to level the playing field I think other things in addition to capital outlays should also be considered.

Regards,

FF
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