Problem ROI, RI, EVA. Performance Auto Company operates a new car division (that sells high- performance sports cars) and a performance parts division (that sells performance-improvement parts for family cars). Some division financial measures for 2017 are as follows HomeInsert Page Layout Formulas Data 2 Total assets 3 Current liabilities 4 5 Required rate of return New Car Performance Division Parts Division $33,000,000 $28,500,000 $ 6,600,000S8,400,000 $ 2,475,000$ 2,565,000 erating income 12% 12% Calculate return on investment (ROI) for each division using operating income as and total assets as a measure of investment. Calculate residual income (RI) for each division using operating income as a me total assets minus current liabilities as a measure of investment. 1. 2. 3. William Abraham, the new car division manager, argues that the performance parts ed up on a lot of short-term debt" to boost its RI. Calculate an alternative Rl for e not sensitive to the amount of short-term debt taken on by the performance parts on the result. 4. Performance Auto Company, whose tax rate is 40%, has two sources of funds: 1 a market value of $18,000,000 at an interest rate of 10% and equity capital with $12,000,000 and a cost of equity of 15%. Applying the same weighted-average cost each division, calculate EVA for each division 5. Use your preceding calculations to comment on the relative performance of each