10. The calculation of a firm's Market Value Added (MVA) and EconomicValue Added (EVA) TD1. your newly appointed boss, has tasked you with evaluating the following financial data for Galaxy Corp. to determine how Galaxy's yalue has changed over the past year. The investment firm for which you work will make a positive (or "buy") recommendation to its investing elients if Galaxy's value has increased over the past year, a neutral (or "hold") recommendation if the value has remained constant, or a negative (or "seli": 2 . 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. Galaxy Corp. Income Statement January 1 - December 31, Year 2 December 31, Year 2 Liabilities and Equity: AccountspayableAccrualsNotespayableTotalcurrentliabilitiesLong-termdebtTotalliabilitiesCommonstock($1par)RetainedearningsTotalequityTotalliabilitiesandequitySharesoutstandingWeightedaveragecostofcapital$192,375125,044269,325$586,744246,881$833,62589,775359,100$448,875$1,282,50089,7757.98%$142,50092,625199,500$434,625182,875$617,50066,500266,000$332,500$950,00066,5007.30% To facilitate your analysis, complete the following table, and use the results to answer the related questions. (Note: Round all percentage chang answers to two decimal places. If a dollar value is below $100, round your answer to two decimal places. If your answer is negative use a minus sign. Using the change in Galaxy's EVA as the decision criterion, which type of investment recommendation should you make to your clients? A hold recommendation A buy recommendation A sell recommendation Which of the following statements are correct? Check all that apply. Galaxy's net income is growing at a rate greater than its sales. This could imply that either its revenues are growing more quickly expenses or that management is being effective in managing its costs while achieving the coported growth in sales, Other things remaining constant, either event should increase the value of the firm. Other things remaining constant, Galaxy's EVA will increase when its ROIC exceeds its WACC