Back Mountain Industries (BMI) has two divisions: East and West. BMI has a cost-of-capital of 15%. Selected financial information (in thousands of dollars) for the first year of business follows:

		East			West
Sales revenue	$	1,000		$	5,000
Income		200			390
Investment (beginning of year)		2,000			3,000
Current liabilities (beginning of year)		200			200
R&D expenditures (note a)		500			400

^a R&D is assumed to benefit two periods. All R&D is spent at the beginning of the year.

Required:

Evaluate the performance of the two divisions assuming BMI uses residual income. (Negative amounts should be indicated by a minus sign.)

East Residual Income:

West Residual Income: