Benson Ltd operates a Car Division (that sells high-performance sport cars) and a Parts Division (that sells performance-improvement parts for family cars). The companys required rate of return is 8%. Some divisional financial measures for the current quarter are as follows: Car Division Parts Division Total assets $ 3,300,000 $ 2,850,000 Current liabilities $ 660,000 $ 840,000 Operating profit $ 247,500 $ 256,500 Required: (a) Calculate the return on investment (ROI) for each division using total assets as a measure of invested capital. (1 mark) (b) Calculate the residual income (RI) for each division using total assets minus current liabilities as a measure of invested capital. (2 marks) (c) The Car Division manager argues that the Parts Division has loaded up a lot of short-term debt to boost its RI. Calculate an alternative RI for each division that is not sensitive to the amount of short-term debt taken on by the divisions. Comment on the result. (3 marks) (d) Benson Ltd has two sources of funds: long-term debt with a market value of $1,800,000 at an after-tax interest rate of 6%, and equity capital with a market value of $1,200,000 and a cost of equity of 12%. The company tax rate is 30%. Calculate the economic valued added (EVA) for each division. (3 marks) (e) Are the measures above consistent in comparing the performance of the two divisions? (1 mark)