Back Mountain Industries (BMI) has two divisions: East and West. BMI has a cost of capital of 20 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 $2,600 760 5,200 360 1,300 West $8,200 870 6,200 360 1,200 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 residual income. (Enter answers in thousands of dollars. Negative amounts should be indicated by a minus sign.) Residual Divisions Income East West a-2. Which division had the better performance? O West O East A division is considering the acquisition of a new asset that will cost $2,520,000 and have a cash flow of $790,000 per year for each of the four years of its life. Depreciation is computed on a straight-line basis with no salvage value. Ignore taxes. Required: a. & b. What is the ROI for each year of the asset's life if the division uses beginning-of-year asset balances and net book value for the computation? What is the residual income each year if the cost of capital is 8 percent? (Enter "Roi" answers as a percentage rounded to 1 decimal place (i.e., 32.1). Negative amounts should be indicated by a minus sign.) Year Investment Base ROI Residual Income 1 % 2,520,000 2 % % 3 4 %