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	$ 1,900	$ 6,200
Income	190	432
Divisional assets (beginning of year)	1,000	1,500
Current liabilities (beginning of year)	270	270
R&D expendituresa	950	870

^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).

a-2. Which division had the better performance?