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E13.28 LO13.1 13.7 ROI and EVA: service firm Ready Rentals Ltd consists of two divisions. The Equipment Rental Division rents machinery, such as cement mixers and scissor lifts, to building contractors. The Truck Rental Division rents forklift trucks and removal trucks. The financial results for the two divisions for the most recent year are as follows: Operating profit after Equipment Rental Division Truck Rental Division $ 45 000 $ 110 000 tax Total assets Current liabilities 750 000 3 000 000 80 000 250 000 Ready Rentals obtains its financing from long-term debt and shares, and the weighted average cost of capital is estimated to be 6 per cent. To calculate ROI, invested capital is defined as total assets less current liabilities. Required: 1 Calculate the ROI for the two divisions. 2 Calculate the EVA for each division. 3 Which division has performed better? Explain your answer.