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

	North Division			South Division
Division operating profit	$	9,635,000		$	43,810,000
Division investment		47,000,000			337,000,000

The cost of capital for the company is 9 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 companys cost of capital were 18.0 percent?

1. When evaluated by ROI?

	Yes
	No

2. When evaluated by EVA?

	Yes
	No