The following information pertains to Baya Inc. for the year ended December 31

BAYA INC. Consolidated Balance Sheet December 31

Assets Current assets Cash $ 210,000 Receivables 195,000 Inventories 380,000 785,000 Net property, plant and equipment 1,100,000 Goodwill 450,000 Total assets $ 2,335,000 Liabilities Current liabilities Payables $ 580,000 Long-term debt 800,000 Total liabilities 1,380,000 Shareholders equity Common shares 705,000 Retained earnings 250,000 Total liabilities and shareholders equity $ 2,335,000 Operating income before interest and taxes $ 160,000 Impairment loss of goodwill included in the calculation GAAP income 2,800 Development cost capitalized under GAAP 6,000 Development cost expensed under GAAP 8,200 Research costs expensed under GAAP 12,600 Total depreciation of all equipment 25,000

Additional information: 1. The marginal tax rate is 40%. 2. The cost of equity is 9%. 3. The market yield on equivalent debt is 4%. 4. Assume that all research and development costs were incurred on January 1. 5. Assume that the fair values of debt and equity are close to their accounting values. 6. Amortized is over a period of 6 years. 7. Selling price per unit $30 8. Variable cost per unit $18 9. Annual fixed costs $375,200 10. Note: The capital employed is equal to investment. Required 1) Determine the economic value added (EVA) for the year ended December 31. (7 Marks) 2) Calculate the operating income required for Baya Inc. if the company would want to achieve 16% return on investment (ROI). (1 Marks) 3) Calculate how many units Baya Inc. must sell to achieve 16% return on investment(ROI). (2 Marks) 4) If Baya Inc. wants an ROI of 20% and expects to sell 45,000 units. Calculate the new selling price of the product. (2 Marks) 5) If Baya Inc. has a residual income of $42,500 and cost of capital is 15% calculate the corresponding Operating Income and return on investment (ROI). (3 Marks)