Lasky Manufacturing has two divisions: Carolinas and Northeast. Lasky has a cost of capital of 7.5 percent. Selected financial information (in thousands of dollars) for the first year of business follows:

Carolinas Northeast

Sales revenue $ 2,000 $ 6,400

Income 160 312

Divisional assets (beginning of year) 1,000 1,500

Current liabilities (beginning of year) 280 280

R&D expendituresa 1,000 920

aR&D is assumed to benefit two periods. All R&D is spent at the beginning of the year.

Required: a-1. Evaluate the performance of the two divisions assuming Lasky Manufacturing uses economic value added (EVA)