all

6. Describe at least three measures used to evaluate performance of investment center division managers. 7. What are the two weaknesses of using segmented net income to evaluate managers of investment centers? What performance measures would you use to overcome these weaknesses? 12. Describe residual income (RI), and explain how RI can resolve the conflict between division manager goals and company goals often created by using ROI. 13. Explain the difference between Rl and economic value added. 22. Economic Value Added (EVA).Farmington Company has two divisions - Hardware and Software. Adjustments have already been made to net operating profit after taxes (NOPAT)and average operating assets for the purposes of calculating EVA for each division. This adjusted information is shown as follows. Assume the company's cost of capital is 12 percent. Calculate economic value added for each division. Hardware Division Software Division NOPAT- adjusted $810,000 $980,000 Average operating assets adjusted 3,500,000 3,200,000