Final answer:
The EVA estimation method starting with cash sales and subtracting depreciation, economic expenses, and taxes is the Cash flow-based approach, distinct from economic profit which considers implicit costs.
Step-by-step explanation:
The approach to estimating EVA (Economic Value Added) that begins with cash sales and subtracts depreciation, recurring cash economic expenses, and cash operating taxes is known as the Cash flow-based approach. This approach focuses on assessing a company's performance based on the cash it generates. To understand this approach, it is crucial to grasp the concept of economic profit, which is total revenue minus both explicit costs (such as materials and labor) and implicit costs (such as opportunity costs). In contrast, accounting profit considers only explicit costs and is the basis for income tax calculations. Economic profit is a more comprehensive measure of a company's true profitability.