ROI and EVA. Saints, Inc., has the following data available for two of its divisions for last year:

	Rugby	Cricket
Sales	$230,000	$520,000
Contribution Margin	90,000	220,000
Operating Income	60,000	90,000
Average Operating Assets	180,000	380,000
Average Current Liabilities	20,000	30,000
Weighted Average Cost of Capital	10%	10%

The tax rate for Saints, Inc. is 30 percent.

a. Compute the following for each division:

1. Sales margin

2. ROI

3. EVA

b. Briefly discuss which division appears most successful and why.

c. Assume a prospective project for the Rugby Division has operating income of $10,000, average operating assets of $60,000, average current liabilities of $4,000, and has a positive net present value. Assume the manager of this division is evaluated based on ROI for merit pay and promotion. Would that manager want to go ahead with this prospective project? Would your answer change if the manager were evaluated based on EVA? If so, how and why would your answer change?