Back to Assignment Attempts: 0.5 Keep the Highest: 0.5/3 11. The calculation of a firm's Market Value Added (MVA) and EconomicValue Added (EVA) Tristan, your newly appointed boss, has tasked you with evaluating the following financial data for Water and Power Co. to determine how Water & Power's value has changed over the past year. The investment firm for which you work will make a positive (or "buy") recommendation to its investing clients if Water & Power's value has increased over the past year, a neutral (or "hold") recommendation if the value has remained constant, or a negative (or "sell") recommendation if the value has decreased. He has recommended that you use several metrics to ascertain how the firm's value has changed, and he has provided you with the following income statement and balance sheet. Water and Power Co. Income Statement January 1 - December 31, Year 2 Sales Year 2 $4,200,000 Year 1 $4,000,000 Expenses 3,360,000 3,280,000 EBITDA $840,000 $720,000 Depreciation and amortization 147,000 140,000 expense EBIT $693,000 Interest expense EBT Tax expense (40%) Net income 126,000 $567,000 226,800 $580,000 100,000 $480,000 192,000 $340,200 $288,000 Common dividends $204,120 $172,800 Addition to retained earnings $136,080 $115,200 Excludes depreciation and amortization