Bentler Industries provides high-technology navigation and communication equipment for the aerospace and shipbuilding industries. It is organized into two divisions, Aeronautics and Marine. The division presidents are given wide decision-making authority that covers operations, marketing, and asset acquisition and disposal. Bentler evaluates the division presidents on, among other things, ROI in their respective divisions. ROI is based on after-tax divisional income and beginning-of-year assets. Divisional income includes allocated corporate overhead.

For the most recent year (year 3), data from the two divisions shows the following:

	Aeronautics Division	Marine Division
Allocated corporate overhead ($000)	$ 16,300	$ 15,500
Cost of sales	21,300	14,900
Other general and administrative costs	1,090	2,550
R&D costs	18,900	6,300
Sales	60,600	56,000
Total assets (January 1,Year 3)	28,700	47,950

The tax rate applied at Bentler is 20 percent.

Looking at the ROI results for year 3, the president of Aeronautics Division complains that the division is evaluated unfairly because of the accounting rules that R&D expenditures be expensed in the year incurred. The president believes that the type of R&D performed in both Aeronautics and Marine Division generate benefits over a three-year period.

In order to consider the president's complaint, the company considers some additional information. First, divisional balance sheets as of January 1, year 3 follow.

Bentler Industries
Divisional Balance Sheets
January 1, Year 3
($000)
	Aeronautics Division	Marine Division	Total
Assets
Cash	$ 1,550	$ 1,150	$ 2,700
Accounts receivable	1,450	1,550	3,000
Inventory	900	1,250	2,150
Total current assets	$ 3,900	$ 3,950	$ 7,850
Fixed assets (net)	24,800	44,000	68,800
Total assets	$ 28,700	$ 47,950	$ 76,650
Liabilities and Equities
Accounts payable	$ 1,100	$ 1,050	$ 2,150
Other current liabilities	1,700	2,600	4,300
Total current liabilities	$ 2,800	$ 3,650	$ 6,450
Long-term debt	0	0	0
Total liabilities	$ 2,800	$ 3,650	$ 6,450
Total shareholders equity	25,900	44,300	70,200
Total liabilities and equities	$ 28,700	$ 47,950	$ 76,650

Historical information on R&D expenditures follow here:

R&D Expenditures ($000)
Years 1 to 3
	Aeronautics Division	Marine Division
Year 1	$ 12,900	$ 5,700
Year 2	16,500	6,900
Year 3 (Current Year)	18,900	6,300

Required:

Compute the economic value added (EVA) for each division for year 3. Assume that the R&D expenditures are incurred uniformly over the year. Bentler uses a cost of capital of 12 percent.