Envision Company has a target return on capital of 12 percent. The following financial information is available for October ($ thousands):

Required

a. Compute the return on investment using both book and current values for each division. (Round answers to three decimal places.)

b. Compute the residual income for both book and current values for each division.

c. Compute the economic value added income for both book and current values for each division if the tax rate is 30 percent and the weighted average cost of capital is 10 percent.

d. Does book value or current value provide a better basis for performance evaluation? Which division do you consider the most successful?

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ible for October is thousands Software Division (Value Base) Consulting Division (Value Base) Venture Capital Division (Value Base) Book Current Book Current Book Current Sales... $100,000 $100,000 $200,000 $200,000 $800.000 $800,000 Income 12,250 11,700 16,400 20,020 56,730 51,920 Assets. 70,000 90,000 100,000 110,000 610,000 590,000 Liabilities. 10,000 10,000 14,000 14,000 40,000 40,000