Revenues Cost of sales Selling, General and Administrative (all fixed) Corporate overhead Region I Region II $ 1,212,000 456,000 438,000 $ 1,662,000 816,000 648,000 Region III $ 2,262,000 1,146,000 868,000 Total Corporation $ 5,136,000 2,418,000 1,954,000 456,000 Information on the division assets in the three regions of Lauderdale Corporation follows: Region I Region II Region III $ 712,000 642,000 1,305,500 Lauderdale Corporation has a cost of capital of 8.6 percent. The individual regions are responsible for research and development (R&D) decisions and for current liabilities. Information on R&D expenditures (which are included in SG&A) for the year and current liabilities for the three regions follows: R&D expenditures Current liabilities Region I $ 174,000 114,000 Region II $ 234,000 164,000 Region III $474,000 214,000 R&D expenditures are assumed to be incurred uniformly over the period and are expected to generate benefits for three years. Required: a. Compute economic value added for the three regions. Ignore taxes. b. How have these regions performed?