ROI, Residual Income, and EVA with Different Bases

Paradyme Company has a target return on capital of 12 percent. The following financial information is available for October:

		Software		Consulting		Venture capital
	Book	Current	Book	Current	Book	Current
Sales	$100,000	$100,000	$200,000	$200,000	$800,000	$800,000
Income	12,000	10,000	16,000	17,000	50,000	52,000
Assets	60,000	80,000	90,000	100,000	600,000	580,000
Liabilities	10,000	10,000	14,000	14,000	40,000	40,000

1. Compute the return on investment using both book and current values for each division.
2. Compute the residual income for both book and current values for each division