Excel Auto Company operates a new car division (that sells high-performance sports cars) and a performance parts division (that sells performance-improvement parts for family cars). Some division financial measures for 2020 are as follows: (Click the icon view the data.) A B C 1 2 Total assets 3 Current liabilities 4 Operating income 5 Required rate of return New Car Division Performance Parts Division $ 32,187,500 $ 23,000,000 $ 2,575,000 $ 13% 6,300,000 $ 8,100,000 2,530,000 13% Requirement 1. Calculate return on investment (ROI) for each division using operating income as a measure of income and total assets as a measure of investment. (Enter the ROI as a percent rounded to one decimal place in the format X.X%.) ROI New Car Division Performance Parts Division 8.0 % 11.0 % Requirement 2. Calculate residual income (RI) for each division using operating income as a measure of income and total assets minus current liabilities as a measure f investment. (Use parentheses or a minus sign to enter residual losses.) New Car Division Performance Parts Division RI $ (790,375) $ 593,000 Requirement 3. William Abraham, the new car division manager, argues that the performance parts division has "loaded up on a lot of short-term debt" 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 performance parts division. Comment on the result. Begin by calculating an alternative RI for each division that is not sensitive to the amount of short-term debt taken on by the performance parts division. (Use parentheses or a minus sign RI $(1,609,375) enter residual losses.) New Car Division Performance Parts Division $ (460,000) With this new measure that the divisions are not insensitive to the level of short-term debt, the new car division still earning the 13% required rate of return on their assets. has a relatively worse RI than the performance parts division. Both Rls are negative, indicating that Requirement 4. Excel Auto Company, whose tax rate is 35%, has two sources of funds: long-term debt with a market value of $15,000,000 at an interest rate of 10%, and equity capital with a market value of $13,000,000 and a cost of equity of 17%. Applying the same weighted-average cost of capital (WACC) to each division, calculate EVA for each division. Begin with the EVA of the new car division, then the performance parts division. (Round the WACC to five decimal places in the format X.XXXXX. Round your intermediary calculations to the nearest whole number. Use parentheses or a minus sign when entering a negative EVA.) New Car Division Performance Parts Division EVA