Houghton Chemicals, which started operations one year ago, has two divisions: Alloys and Petro. Both divisions invest heavily in R&D, which is assumed to generate benefits for five years. R&D spending is made uniformly throughout the year. Houghton Chemicals has a cost of capital of 11 percent. Selected financial information for the two divisions (in thousands of dollars) for the year just completed follows:

	Alloys	Petro
Sales revenue	$ 9,400	$ 7,500
Divisional income	977	1,145
Divisional investment	7,550	9,000
Current liabilities	360	400
R&D	400	500

Required:

Evaluate the performance of the two divisions assuming Houghton Chemicals uses residual income.

Note: Enter your answers in thousands of dollars rounded to 1 decimal place.

A. Residual Income of Alloys Division

B. Residual Income of Petro Division

C. Which division performed better?