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Back Mountain Industries (BMI) has two divisions: East and West. BMI has a cost of capital of 10 percent. Selected financial information (in thousands of
Back Mountain Industries (BMI) has two divisions: East and West. BMI has a cost of capital of 10 percent. Selected financial information (in thousands of dollars) for the first year of business follows Sales revenue Income Investment (beginning of year) Current liabilities (beginning of year) R&D expenditures East West S1,300 $5,600 570 2,300 3,300 230 550 350 230 650 R&D is assumed to benefit two periods. All R&D is spent at the beginning of the year Required a-1. Evaluate the performance of the two divisions assuming BMI uses return on investment (ROI). Round your final answers to nearest whole percentage value.) Divisions RO East West a-2. Which division had the better performance? O East O West
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