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	$ 2,100	$ 6,600
Income	170	372
Divisional assets (beginning of year)	1,000	1,500
Current liabilities (beginning of year)	290	290
R&D expendituresa	1,050	970

^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 uses return on investment (ROI).

a-2. Which division had the better performance?