Sapsora Company uses ROI to measure the performance of its operating divisions and to reward division managers. A summary of the annual reports from two divisions is shown as follows. The company's weighted-average cost of capital is 11 percent.

Division ADivision BTotal assets$6,040,000$8,710,000Current liabilities$500,000$1,750,000After-tax operating income$1,000,000$1,156,200ROI25%16%

a.Which division is more profitable in absolute dollars?

b.Compute the EVA for Division A and Division B.

c.Suppose the manager of Division A was offered a one-year project that would increase his investment base by $250,000 and show a profit of $30,000. Would the manager be motivated to invest in the new project?