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 shown provided below. The company's weighted average cost of capital is 11 percent. Total assets Current liabilities After-tax operating income ROI Division A $ 6,280,000 $ 700,000 $ 1,080,000 26% Division B $ 8,470,000 $ 1,900,000 $ 1,188,900 15% 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. c. Suppose the manager of Division A was offered a one-year project that would increase her investment base by $200,000 and increase her divisional operating income by $32,000. 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