Normandy Instruments Invests heavlly in research and development $($R&D$),$ although it must currently treat its R&D expenditures as expenses for financlal accounting purposes. To encourage Investment in R&D$,$ Normandy evaluates its divislon managers using EVA. The company adjusts accounting income for R&D expenditures by assuming these expenditures create assets with a two$-$year llfe. That is$,$ the R&D expendltures are capitallzed and then amortized over two years.

Aerospace Divislon of Normandy shows after$-$tax Income of $$18\mathrm{.}006$ million for year $2.$ R&D expenditures In year $1$ amounted to $$7\mathrm{.}206$ million and In year $2,$ R&D expenditures were $$12\mathrm{.}006$ millilon. For purposes of computing EVA, Normandy assumes all R&D expenditures are made unlformly over the year. Before adjusting for R&D$,$ Aerospace Divislon shows assets of $$72\mathrm{.}006$ milllon at the beginning of year $2$ and current llabilitles of $$1,506,000.$ Normandy computes EVA using divislonal Investment at the beginning of the year and a $12$ percent cost of capital.

Required:

Compute EVA for Aerospace Dlvision for year $2.$

Note: Enter your answers in dollars, not In millions.

complete but not entirely correct.

$\backslash$table$[[$nal income,$$,12,340,000$