Alexis, your newly appointed boss, has tasked you with evaluating the following financial data for extensive enterprise inc. to determine how Extensive'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 Extensive's value has increased over the past year, a neutral (or "Hold") recommendation if the value has remained constant, or negative (or "Self") 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.

12. The calculation of a firm's Market Value Added (MVA) and Economic Value Added (EVA) Alexis, your newly appointed boss, has tasked you with evaluating the following financial data for Extensive Enterprise Inc. to determine how Extensive'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 Extensive'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 statem ent and balance sheet. Extensive Enterprise Inc. Income Statement January 1 - December 31, Year 2 Extensive Enterprise Inc. Balance Sheet December 31, Year 2 Year 2 $7,187,500 5,750,000 1,437,500 251,563 1,185,937 215,625 970,312 388,125 $582,187 $349,312 $232,875 Year 1 $6,250,000 5,125,000 1,125,000 218,750 906,250 156,250 750,000 300,000 $450,000 $270,000 $180,000 Year 2 $409,688 1,365,625 2,389,844 4,165,157 2,662,968 $6,828,125 Year 1 $356,250 1,187,500 2,078,12!5 3,621,875 2,315,625 $5,937,500 Cash and cash equivalents Receivables Inventory Expenses1 EBITDA Depreciation and amortization expense Current assets EBIT Net fixed assets Interest expense Total assets EBT Tax expense (40%) Net income Liabilities and Equity: Accounts payable $1,024,219 665,742 1,433,906 3,123,867 $890,625 578,906 1,246,875 2,716,406 1,142,969 3,859,375 415,625 1,662,500 2,078,125 $5,937,500 415,625 Notes payable Common dividends Addition to retained earnings Excludes depreciation and amortization Total current liabilities Long-term debt Total liabilities Common stock ($1 par) Retained earnings 4,438,281 477,969 1,911,875 2,389,844 $6,828,125 Total equity Total debt and equity Shares outstanding 477,969 Weighted average cost of capital