The following information has been collated for one of the divisions of Lade Co: Values at 30 November 2011:

Book Value ( ksh) Economic value (estimated) Kshs

Total assets (note 1) 1,738,674 2,869,522

Current liabilities 428,255 565,834

Non-current liabilities 727,815 828,944

Results for year to 30 November 2011: ( Ksh)

Profit before interest and tax 329,463

NOPAT 301,500

The company has a target rate of return of 13·5% per annum, and the weighted average cost of capital for the division is estimated to be 14·7% per annum. All borrowing is arranged centrally. An interest rate of 12·6% per annum applies to the most recently arranged loan.

Note 1: The book value of assets includes a receivables allowance of Kshs 17,890. The allowance has also been included in the calculation of the economic value of assets.

Required: For the year to 30 November 2011, calculate the divisional RI and the divisional EVA® and briefly comment on the results of your calculations.