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Rafael, your newly appointed boss, has tasked you with evaluating the following financial data for Atherton Corp. to determine how Atherton's value has changed over
Rafael, your newly appointed boss, has tasked you with evaluating the following financial data for Atherton Corp. to determine how Atherton'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 Atherton'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 has provided you with the following income statement and bance January 1 - December 31, Year 2 Balance Sheet December 31, Year 2 To facilitate your analysis, complete the following table, and use the results to answer the related questions. (Note: Round all percentage change 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 Atherton's EVA as the decision criterion, which type of investment recommendation should you make to your clients? A buy recommendation A sell recommendation A hold recommendation Which of the following statements are correct? Check all that apply. For any given year, one way to compute Atherton's EVA is as the difference between its NOPAT and the product of its operating capital and its weighted average cost of capital. Investor-supplied operating capital is recorded as accounts payable, accruals, and short-term investments. The percentage change in Atherton's MVA indicates that its management has increased the firm's value. Atherton's NCF is calculated by adding its annual depreciation and amortization expense to the corresponding year's EBITDA. The percentage change in Atherton's EVA indicates that management has increased its value
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