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undefined Universal Electronics, Inc. (UEI), which started operations one year ago, has two divisions: Consumer and Commercial. Both divisions invest heavily in R&D, which is
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Universal Electronics, Inc. (UEI), which started operations one year ago, has two divisions: Consumer and Commercial. Both divisions invest heavily in R&D, which is assumed to benefit five years. R&D spending is made uniformly throughout the year. UEl has a cost of capital of 11 percent. Selected financial information for the two divisions (in thousands of dollars) for the year just completed follows. Sales revenue Divisional income Divisional investment Current liabilities R&D Consumer $22,000 3,850 27,500 1,000 1,000 Commercial $37,000 3,885 27,750 800 1 1,000 Required: Evaluate the performance of the two divisions assuming UEl uses economic value added (EVA). (Enter your answers in dollars rounded to 1 decimal place.) Answer is complete but not entirely correct. EVA of Consumer division EVA of Commercial division $ 825.0 X $ 810.5 X The Consumer division performed better Which division performed betterStep by Step Solution
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