Heather Smith Cosmetics (HSC) manufactures a variety of products and is organized into three divisions (investment centers): soap products, skin lotions, and hair products. Information about the most recent years operations follows. The information includes the value of intangible assets, including research and development, patents, and other innovations that are not included on HSCs balance sheet. Were these intangibles to be included in the financial statements (as they are for EVA), the increase in the balance sheet and the increase in after-tax operating income would be as given below:

Division	Operating Income	Average Total Assets	Value of Intangibles	Intangibles Effect on Income
Soap products	$ 3,240,500	$ 59,990,500	$ 1,490,500	$ 990,500
Skin lotions	2,740,500	32,990,500	7,990,500	5,990,500
Hair products	4,990,500	54,990,500	990,500	690,500
Minimum desired rate of return	5.00%
Cost of capital	4.00%

3. Calculate EVA for each division.