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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
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. Vel 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. Consumer Commercial Sales revenge $54,000 585,000 Divisional income 11.500 Divisional investment 35,500 39,750 Current liabilities 4,200 4,000 11.925 RED 4.200 4,200 Required: Evaluate the performance of the two divisions assuming UEl uses economic value added (EVA) (Enter your answers in thousands of dollars rounded to 1 decimal place.) Answer is complete but not entirely correct. EVA of Consumer division EVA of Commercial division Which division performed better? $ 8,057 0 $7,9925 The Consumer division performed better
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