E17.4 (LO 3), AN It is the end of the third quarter, and Smyrna is evaluating the performance of two key divisions in the company. Both divisions had $50,000 cash available for investment in the fourth quarter, so Smyrna is now analyzing each division before a potential investment. She has gathered the following condensed income statements and selected information from the balance sheet for each division. The company's minimum required rate of return is 9%, while its weighted average cost of capital is 8%. Its effective tax rate is 25%. Sales COGS Gross margin Operating expenses Operating income Operating assets Total assets Current liabilities East $ 890,000 415,000 475,000 435,000 40,000 $ $ 800,000 1,200,000 160,000 West $1,250,000 $ 720,000 530,000 490,000 40,000 $ 500,000 800,000 50,000 Required a. Calculate the current ROI, RI, and EVA for each division through the third quarter. For ROI purposes, operating assets are considered investments. b. How much would each division need to generate in new operating income in the fourth quarter to reach the company's desired ROI of 12% at year-end, assuming each division uses its available $50,000 to pur- chase a new investment? Assume it is a $50,000 nondepreciable asset but still included in operating assets. c. How much new operating income would each division need to generate in the fourth quarter to reach a positive RI by year-end? Assume again that each division purchases a $50,000 nondepreciable asset that is still included in operating assets. Dete and