The following data are available for two divisions of Solomons Company:

North DivisionSouth DivisionDivision operating profit$9,200,000$42,000,000Division investment46,000,000336,000,000

The cost of capital for the company is 7 percent. Ignore taxes.

Required:

a-1.Calculate the ROI for both North and South divisions.(Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).)

a-2.If Solomons measures performance using ROI, which division had the better performance?

North/South

b-1.Calculate the EVA for both North and South divisions. (The divisions have no current liabilities.)

b-2.If Solomons measures performance using economic value added, which division had the better performance?

North/South

c.Would your evaluation change if the company's cost of capital were 15.0 percent?

1.When evaluated by ROI?

Yes/No

2.When evaluated by EVA?

Yes/No