Qin Motor Oils is a Chinese multinational firm that specializes in the production of premium motor oils used in vehicles. In 2017, the firm made a strategic decision to expand into emerging markets under a new division called EMEA - a shorthand designation for Europe, Middle East and Africa. Each market or country unit is lead by a general manager from that country and reports to the Vice President of the EMEA division. Operating results for the division and demographic information about the markets in 2019 are as follows:

Income Statement For 2019 ($ 000)
	South Africa	Egypt	Kenya
Revenue	$18,000	$9,500	$2,500
Cost of sales	8,650	4,200	1,100
Allocated corporate overhead	432	228	60
Local advertising	5,100	2,955	960
Other general and admin	868	437	350
Operating income	$2,950	$1,680	$30
Tax expense	885	504	9
Net Income	$2,065	$1,176	$21
Other country information:
Number of vehicles (millions)	11.10	9.90	3.20
GDP per capita (in U.S. dollars)	7346	3008	1237

Simon hires a compensation consultant who advises him to consider using Economic Value Added (EVA) for performance evaluation. This measure is calculated by deducting a capital charge from adjusted NOPAT. The company, by corporate policy, uses a 20% weighted average cost of capital for investment decisions and a tax rate of 30%.

The consultant recommends adjusting the profit for advertising expenses which according to a study in the United States have an expected life of about three years. For EVA purposes, the company will adjust operating profit by capitalizing and amortizing advertising costs on a straight-line basis over 3 years, beginning in the year of the expenditure. Jane Papergood, the division controller, has extracted the following history of advertising expenses:

Historical Advertising Expenses
	South Africa	Egypt	Kenya	Total
2018	5100	2502	600	8202
2017	4200	2400	549	7149
2016	4500	2700	570	7770

1. Calculate the 2019 EVAs and then rank the three-country units based on your calculated EVA (12 points)

6. Comment on the differences in your rankings based on earnings, ROI, and EVA and explain to Mr. Chen, which country manager performed best. Be sure to highlight the trade-offs between the different measures in your comment (6 points)