Part 1

Part 2

Part 3

Back Mountain Industries (BMI) has two divisions: East and West. BMI has a cost of capital of 15 percent. Selected financial information (in thousands of dollars) for the first year of business follows: Sales revenue Income Investment (beginning of year) Current liabilities (beginning of year) RSD expendituresa East $2.600 1,000 3,600 360 1,300 West 58.2ee 1,350 4,600 360 1,200 R&D is assumed to benefit two periods. All R&D is spent at the beginning of the year. Required: a-1. Evaluate the performance of the two divisions assuming BMI uses return on investment (ROI). (Round your final answers to nearest whole percentage value.) Answer is complete but not entirely correct. Divisions East ROI 1,619 1,734 % % West Back Mountain Industries (BMI) has two divisions: East and West. BMI has a cost of capital of 20 percent. Selected financial information (in thousands of dollars) for the first year of business follows: Sales revenue Income Investment (beginning of year) Current liabilities (beginning of year) R&D expendituresa East $2,000 550 4,000 300 1,000 $7,000 690 5,000 300 900 R&D is assumed to benefit two periods. All R&D is spent at the beginning of the year, Required: a-1. Evaluate the performance of the two divisions assuming BMI uses residual income (Enter answers in thousands of dollars. Negative amounts should be indicated by a minus sign.) Divisions Residual Income $ 300 East West $ 110 Back Mountain Industries (BMI) has two divisions: East and West. BMI has a cost of capital of 20 percent Selected financial Information (in thousands of dollars) for the first year of business follows. Sales revenue Income Investment (beginning of year) Current liabilities (beginning of year) R&D expendituresa East $3,600 655 1,650 330 1,150 West $7,600 780 2,600 330 1,050 R&D is assumed to benefit two periods. All R&D is spent at the beginning of the year. Required: -1. Evaluate the performance of the two divisions assuming BMI uses economic value added. (Enter answers in thousands of dollars. Round your answers to 1 decimal place.) EVA Divisions East West