Bailey uses ROI to measure the performance of its operating divisions and to reward its division managers. A summary of the annual reports from two of Baileys divisions is shown provided below.

The companys weighted-average cost of capital is 11 percent.

Division A Division B Total assets $ 6,400,000 $ 8,350,000

Current liabilities $ 800,000 $ 1,950,000

After-tax operating income $ 1,120,000 $ 1,208,000

ROI 26 % 12 % a. Based on ROI, Division A generates more profit per dollar of invested capital than Division B. Compute the EVA for Division A and Division B.