Exercise 25.4 (Algo) ROI versus EVA Measures (LO25-2, LO25-3, LO25-4) Bailey uses ROI to measure the performance of its operating divisions and to reward its division managers. A summary of the annual reports from two of Bailey's divisions is provided below. The company's weighted-average cost of capital is 10 percent. Total assets Division A $ 6,140,000 Current liabilities After-tax operating income 600,000 1,040,000 Division B $8,610,000 1,800,000 1,167,000 ROI 24% 13% Required: a. Based on ROI, Division A generates more profit per dollar of invested capital than Division B. Compute the EVA for Division A and Division B. b. Suppose the manager of Division A was offered a one-year project that would increase her investment base by $300,000 and increase her divisional operating income by $33,000. Would she be motivated to invest in this project? Complete this question by entering your answers in the tabs below. Required A Required B Based on ROI, Division A generates more profit per dollar of invested capital than Division B. Compute the EVA for Division A and Division B. EVA for Division A EVA for Division B Requred A Required B >